Nevada Gaming Regulator Sues Polymarket over Sports Betting Claims
Nevada’s gaming regulator has filed suit alleging an unlicensed prediction market is operating as an illegal sportsbook.
LISTEN TO THIS ARTICLE:The Nevada Gaming Control Board announced Friday that it has lodged a civil complaint in Carson City District Court against Blockratize Inc., which does business as Polymarket, accusing the company of operating a derivatives-style exchange that effectively accepts unlicensed sports wagers in violation of Nevada law. The board has asked the court for a declaratory ruling and an injunction to stop Polymarket from offering what regulators say amounts to illegal wagering to Nevada residents.
The move marks a tactical escalation beyond the cease-and-desist letters regulators have issued in recent years to prediction-market platforms. Those earlier administrative orders largely failed to halt activity because the companies argued they were regulated by the federal Commodity Futures Trading Commission and thus not subject to state gambling statutes. Legal observers expect Polymarket to challenge jurisdiction and seek to have the case removed to federal court, following the path taken by KalshiEx LLC in a separate Massachusetts dispute last year.
Prediction markets, which allow trading in contracts that settle on event outcomes, expanded into sports betting in the last 18 months, drawing scrutiny from several states. Nevada’s complaint highlights that trend and underscores a broader contest over whether sports-related contracts should be treated as state-regulated gambling or as federally regulated futures and derivatives.
Related: Polymarket Could Return to the US as Soon as Today
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National Pushback, NCAA Concerns and State Betting Expansions
Regulatory friction has intensified nationwide. Massachusetts filed a state-court action in September against KalshiEx LLC after the platform received a cease-and-desist order in March. Several other states have lodged complaints or are considering legislation to clarify that sports betting falls under state gaming authorities rather than federal commodity regulators.
The debate has attracted attention from the NCAA. In a Jan. 14 letter to CFTC Chairman Michael Selig, NCAA President Charlie Baker wrote, “I implore you to suspend collegiate sport prediction markets until a more robust system with appropriate safeguards is in place. The NCAA is willing to work with the CFTC to develop such a system that protects student-athletes and consumers from harm.” Baker cited concerns including underage participation, advertising violations and harassment of student-athletes.
Industry officials and state regulators have been watching market developments closely. Jim Plousis, chairman of the New Jersey Casino Control Commission, pointed to last year’s surge in internet casino revenue as evidence that regulated markets can thrive: “In-person and online gaming can succeed together”, he said, noting that licensed online casinos in New Jersey won more than $2.91 billion in 2025 – surpassing Atlantic City’s brick-and-mortar take for the first time – while statewide gaming revenue topped $6.98 billion.
A Nevada gaming attorney who reviewed the lawsuit described it as an attempt to force the jurisdictional question into a state forum. “The board is trying to draw a clear line: if it functions like a sportsbook, it must comply with state licensing and consumer-protection standards”, the attorney said. “Expect the operator to move quickly to federal court and argue CFTC oversight preempts state action.”
Meanwhile, states continue to expand traditional sports wagering. Casino operators in Nebraska have launched an initiative to add mobile sports betting; Mississippi lawmakers have introduced measures to permit mobile wagering through existing licensees; and a Georgia bill would task the Georgia Lottery Commission with regulating up to 18 sportsbook licenses, potentially making Georgia the 39th state to allow sports betting if enacted.
As the Polymarket case advances in Carson City, it could set a consequential precedent on where novel betting products must be regulated – at the state level under gaming statutes or under federal derivatives law overseen by the CFTC. The outcome is likely to shape how prediction markets, sports leagues, universities and state regulators handle an increasingly blurred line between trading and gambling.
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