Nevada Judge Blocks Polymarket, Rejects CFTC Exclusivity Defense
A Nevada judge has issued a temporary restraining order against Polymarket, ruling that federal CFTC oversight does not shield the platform from state gambling laws.
The 14-Day Lockout
Nevada District Court Judge Jason D. Woodbury has granted a temporary restraining order (TRO) barring prediction market leader Polymarket from operating in the state for 14 days. The order, issued following a civil enforcement action by the Nevada Gaming Control Board (NGCB), compels Polymarket’s operator, Blockratize Inc., to immediately cease offering “event-based contracts” to Nevada residents. The platform has already complied, implementing geo-blocking measures ahead of a critical preliminary injunction hearing scheduled for February 11.
State Law Trumps Federal Preemption
The ruling strikes a direct blow to the crypto industry’s core defense: that federal oversight preempts state gambling laws. Polymarket, and competitors like Kalshi, have long argued that registration with the Commodity Futures Trading Commission (CFTC) shields them from local gaming regulators. Judge Woodbury explicitly rejected this view, stating the NGCB is “reasonably likely to prevail” in its argument that prediction markets constitute unlicensed wagering. In his decision, Woodbury noted that the Commodity Exchange Act does not grant the CFTC exclusive jurisdiction over these specific types of event contracts, opening the door for state-level enforcement.
The 50-State Nightmare Scenario
This decision accelerates a hostile trend for prediction markets, which had seen volume surge under a perceived regulatory thaw. Nevada’s aggressive stance mirrors recent moves by Tennessee, where the Sports Wagering Council issued cease-and-desist orders to Polymarket, Kalshi, and Crypto.com, threatening fines of $25,000 per offense. If Judge Woodbury’s logic holds, prediction platforms may be forced to obtain gambling licenses in every jurisdiction or abandon the U.S. market entirely. A logistical and financial bottleneck that could cripple their liquidity. The ban’s timing is particularly damaging, locking Nevada users out just days before Super Bowl LX, traditionally a high-volume event for prediction markets.
