Polymarket Hit With First US Sports Prediction Market Lawsuit as Nevada Goes on the Offensive
Prediction markets platform Polymarket now faces its first legal action in the U.S., directly targeting its offering of sports event contracts, after the Nevada Gaming Control Board (NGCB) filed a civil enforcement lawsuit seeking to block the platform’s operations in the state. Kalshi has taken most of the heat to date, with several active cases unfolding across the country.
Nevada Files Direct Enforcement Action Against Polymarket
NGCB issued a press release on January 16 outlining its filing of a civil enforcement action against Polymarket. In its complaint, the Board said it is seeking “a declaration and injunction to stop Polymarket from offering unlicensed wagering in violation of Nevada law.”
NGCB added that “Nevada’s public policy, as expressed by the Legislature, is that the gaming industry is vitally important to the economy of the state and the general welfare of the inhabitants and therefore must be licensed, controlled, and assisted.”
The regulator wants to block Polymarket from offering sports-event contracts in the state. It argues the activity constitutes illegal gambling under Nevada law.
Gaming attorney Daniel Wallach explained on X that the next logical step for Polymarket is likely to take the matter to federal court, arguing that federal law governs prediction markets. Chief Judge Andrew Gordon has ruled on similar cases in Nevada and has sided with state authorities.
In its filing, the Board said it considers “offering sports event contracts, or certain other event contracts, to constitute wagering activity under NRS 463.0193 and 463.01962 and, therefore, entities offering such event contracts must be licensed.”
As the NGCB sued Polymarket directly, the case now requires complete preemption for Polymarket to remove it to federal court. That means Polymarket will need to successfully argue that federal law entirely replaces state law in this case. That could be a high burden of proof.
In contrast, Kalshi only needed ordinary preemption to show that federal law conflicts with state law. Kalshi sued under federal regulatory authority, arguing that Nevada is interfering with a federally regulated activity, which doesn’t require the same level of proof.
A Different Approach to Combat Prediction Markets
Nevada is just the second state to go on the legal offensive against prediction markets. The other is Massachusetts, where Attorney General Andrea Joy Campbell filed a lawsuit against Kalshi in September. The suit alleges Kalshi was offering illegal sports betting through its sports event contracts.
In most other U.S. cases, regulators have issued cease-and-desist letters. Kalshi or one of its rivals often filed counter-suits, which led to federal court action.
Polymarket only returned to the U.S. market in December with a limited relaunch. It exited in 2022 after settling with the Commodity Futures Trading Commission (CFTC).
After the explosion in popularity of prediction markets over the past 12 months, Polymarket sought to reenter the market by acquiring CFTC-regulated derivatives exchange and clearinghouse QCEX in July 2025. It then got formal approval from the CFTC in September to relaunch.
Nevada Is a Key Battleground State
The NGCB scored a big win in November. Then a judge reversed an April preliminary injunction that had prevented the regulator from taking enforcement action against Kalshi. The most recent ruling found that prediction markets violate state gaming laws. Kalshi is now appealing this decision to the Ninth Circuit.
Discovery is continuing in the case. However, Judge Gordon paused key deadlines pending a Ninth Circuit hearing after Kalshi won a partial stay last week.
If Nevada’s proactive approach against Polymarket proves successful, other states may adopt the same strategy rather than relying on cease-and-desist letters.
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