A Nevada state court on February 5, 2026, declined to issue an emergency temporary restraining order that would have halted Coinbase’s new prediction markets, according to a statement from Coinbase’s chief legal officer, Paul Grewal. The ruling allows the exchange to continue offering the markets while it contests the legality of the products in both state and federal court.
The Nevada Gaming Control Board (NGCB) filed a civil enforcement action in Carson City on Monday, February 1, 2026, accusing Coinbase of offering unlicensed wagers on sports event contracts and requesting the immediate suspension of the products for Nevada residents. The NGCB argues that these contracts qualify as illegal gambling under Nevada law, a position Coinbase is actively challenging.
Coinbase countered the NGCB’s claims by asserting that Nevada’s attempt to block the markets is overly broad and infringes upon federal jurisdiction. The company argues that the contracts are regulated by the Commodity Futures Trading Commission (CFTC) and therefore fall under federal purview, preempting state-level regulation. According to a filing by Coinbase, a broader order from the court would effectively prevent the exchange from offering any CFTC-regulated “event contracts” within the state, even those tied to financial or commodity outcomes.
Coinbase also pointed out that Kalshi, a CFTC-registered market, can continue offering similar contracts directly to Nevada users while the litigation proceeds, suggesting no immediate harm to the state. The exchange has now filed a separate lawsuit in federal court in Nevada, seeking to invalidate the state’s enforcement effort as a violation of federal law. “Congress gave CFTC exclusive jurisdiction over these listed contracts,” Grewal stated, “and it’s Congress that calls the shots.”
The legal dispute between Coinbase and Nevada follows a similar ban of prediction markets operated by Polymarket in the state. This case and the current challenge to Coinbase, are testing the boundaries of state authority over federally regulated financial products. The outcome of the litigation could establish precedent for how states regulate prediction markets and other emerging financial technologies.
A hearing in the Nevada state court is scheduled for next week to allow Coinbase to formally respond to the NGCB’s allegations. The federal court case is proceeding concurrently, with Coinbase seeking a definitive ruling on the issue of federal preemption. As of February 12, 2026, the NGCB has not issued a public response to Coinbase’s federal lawsuit.