Nevada Moves to Block Coinbase Prediction Markets as Tribes Mount Illinois Court Challenge

Coinbase is facing escalating legal and regulatory pressure on two fronts following its nationwide rollout of sports prediction markets, with Nevada regulators moving to shut down its contracts and a coalition of tribes challenging the company’s legal strategy in federal court.

In Nevada, the Nevada Gaming Control Board (NGCB) has filed a civil enforcement action seeking to block Coinbase’s contracts as unlawful wagering. In Illinois, 23 tribes and multiple tribal gaming organizations argue the company’s model threatens tribal exclusivity and compact revenue protected under federal law.

Nevada Enforcement Action

The NGCB stepped in after Coinbase went live with sports prediction markets in all 50 U.S. states on Jan. 28. In a Feb. 3 press release, regulators confirmed they filed legal action the day before, accusing Coinbase of “offering unlicensed wagering” in violation of state law.

The Board said it considers Coinbase’s “event contracts” as wagering activity under Nevada statutes governing sports pools and percentage games. NGCB stated that entities offering such event contracts must hold a state gaming license.

NGCB Chairman Mike Dreitzer said the board “takes seriously its obligation to operate a thriving gaming industry and to protect Nevada citizens. The action taken yesterday reinforces this obligation.”

Board Seeks Immediate Court Relief

According to the 12-page complaint, the NGCB is seeking declaratory and injunctive relief prohibiting Coinbase from offering event-based contracts in Nevada unless and until it obtains proper licensure.

The complaint argues Coinbase “accepts wagers” and takes a commission on those wagers. Therefore, the NGCB argues the platform functions as a sportsbook or sports pool under state law.

NGCB alleges violations of multiple gaming statutes, including provisions that bar unlicensed wagering and the acceptance of bets over the internet without authorization.

The enforcement action against Coinbase marks Nevada’s latest crackdown on prediction platforms. On Jan. 29, regulators secured a 14-day block that forced Polymarket to temporarily exit the market while a judge reviewed a request for a preliminary injunction.

After similar actions against Robinhood, the platform agreed in November to cease operations in Nevada while litigation is ongoing.

The NGCB also remains locked in legal combat with Kalshi. Nevada issued a cease-and-desist order to Kalshi in March 2025, but the platform ignored it. Instead, it fired back with a federal lawsuit aimed at stopping state enforcement.

Kalshi won a temporary injunction in April, but a judge dissolved it in November. The operator has since appealed to the Ninth Circuit, where the case still awaits a ruling.

Tribes Join the Fight in Illinois

Coinbase’s problems don’t stop in Nevada. On Jan. 30, a broad coalition of tribal governments and national Native American organizations filed to intervene in a federal court case against Coinbase in Illinois.

The group includes 23 federally recognized tribes, the Indian Gaming Association, the National Congress of American Indians, multiple state tribal gaming associations, and tribal regulators.

Rather than filing their own lawsuit, the coalition submitted a proposed amicus, or “friend-of-the-court,” brief supporting Illinois regulators and urging the judge to dismiss Coinbase’s suit against the state.

The plaintiffs argue that Coinbase can’t use the Commodity Futures Trading Commission (CFTC) oversight and the Commodity Exchange Act (CEA) to dodge the long-standing system where states and tribes regulate sports betting, especially on Indian lands.

The tribes say Coinbase’s legal theory would effectively sidestep the Indian Gaming Regulatory Act (IGRA). IGRA governs Class III gaming, including sports betting, and guarantees the tribes the right to offer such gaming on their lands through a negotiated state compact signed off by the Secretary of the Interior.

They warn that allowing unlicensed, nationwide event contracts to operate outside that structure would weaken tribal sovereignty. It would also undermine compact protections and siphon revenue that funds essential government services such as healthcare, housing, and education.

The Background in Illinois

Coinbase filed lawsuits in December against Illinois, Michigan, and Connecticut after those states moved to regulate prediction markets.

Illinois responded in court. It argued that Coinbase must obtain a license from the Illinois Gaming Board to offer sports-related contracts to residents.

The state said these contracts lack a fundamental economic or commercial purpose, placing them squarely under state, not federal, gambling laws. The tribes echoed that position.

Similar tribal amicus efforts have also surfaced in related prediction-market litigation in other states, including Tennessee and Connecticut.

With Nevada seeking injunctions that could immediately block access and tribes mounting a sovereignty-based challenge backed by national organizations, pressure on Coinbase is building across multiple jurisdictions.

The coming months could determine whether sports prediction markets are governed primarily by federal derivatives law or remain subject to the same state licensing regimes that oversee sportsbooks and casinos.