Nevada's regulatory stance on prediction markets is quietly shifting, following last year's legal tug-of-war with Kalshi, the state court recently issued a temporary restraining order against Polymarket, prohibiting it from offering contract services to state users on Super Bowl Sunday. The ongoing legal battle over the legality of prediction markets continues to escalate, with federal and state regulatory attitudes diverging, and the casino industry is highly concerned about this emerging business form that could impact the industry structure. Relevant US prediction market compliance regulatory cases can be referenced on the PASA official website.
Legal Confrontation: From Victory to Restriction, Prediction Markets Face Continuous Obstacles
The legal battle between Nevada and prediction markets has seen a significant reversal within a year, with key case developments affecting industry nerves:
Polymarket temporary injunction: On January 16, the Nevada Gaming Control Board (NGCB) sued Polymarket's US affiliate, and state court judge Jason Woodbury issued a two-week temporary restraining order, with a hearing scheduled for February 11 to decide whether to issue a preliminary injunction; Polymarket has suspended access for Nevada users and indicated it will appeal to defend its rights;
Kalshi lawsuit reversal: In March last year, the NGCB first issued a cease order to prediction market operator Kalshi, who sued and won a preliminary injunction, and also won a federal lawsuit related to election betting with the Commodity Futures Trading Commission (CFTC) (CFTC subsequently withdrew the appeal); however, in November, original judge Andrew Gordon, after months of review, revoked the injunction against Kalshi, while also dismissing another prediction market Robinhood's injunction application, focusing the core dispute on whether sports contracts are financial "swaps";
Case impact: Judge Woodbury in the Polymarket case explicitly stated that Judge Gordon's argument "was persuasive," which also became an important basis for issuing the temporary restraining order.
Stances of Various Parties: Casinos Oppose, Regulators Leave Compliance Space
Regarding the legality of prediction markets, regulatory agencies, the casino industry, and platform sides have formed distinct stances:
Casino Industry: Concerned about interest damage, actively involved in litigation
The Nevada Resort Association (representing the casino industry) was allowed to intervene in the Kalshi lawsuit, its president Virginia Valentine stated that prediction markets do not need to comply with responsible gambling requirements, nor do they pay state income tax, "looks just like gambling," which may cause "irreversible damage" to existing gambling practitioners;
Industry attitude: The association closely monitors case developments, believing that prediction markets may impact traditional sports betting businesses, and will continue to follow related legal dynamics.
Regulatory Layer: Currently non-compliant, compliance can be admitted
State regulation: NGCB Chairman Mike Draycott clearly stated that prediction markets currently do not comply with Nevada law, but as long as they meet regulatory requirements, new technologies can fully integrate into the existing regulatory framework;
Federal regulation: The CFTC, once a regulatory agency for prediction markets, withdrew its appeal after the Kalshi federal lawsuit, and has recently signaled a re-engagement, with this stance tending to support prediction market platforms.
Future Direction: Multi-state Game, Compliance is the Key
The path to legalization of prediction markets is still full of uncertainties, and various factors will affect the final direction:
Case follow-up: Polymarket can appeal against the temporary restraining order, the February 11 hearing will decide whether to issue a preliminary injunction, and subsequent appeals through multiple levels of courts may extend the game period;
Multi-state linkage: In addition to Nevada, other major gambling states such as New Jersey are also litigating with prediction markets, with Nevada's court decisions possibly having a demonstrative effect;
Compliance premise: Regulators clearly state that if prediction markets want to gain legal status, they need to meet core requirements such as responsible gambling and tax payment, which is also the key to whether they can integrate into the existing gambling regulatory framework;
Industry impact: If prediction markets eventually achieve compliance admission, it may change the traditional gambling industry structure, otherwise, it will consolidate the existing business form, the result of this game is worth continuous industry attention.
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This article is from "PASA-Global iGaming Leaders" gambling industry news channel:https://t.me/pasa_news
Original in-depth gambling channel:https://t.me/gamblingdeep
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PASA official website: https://www.pasa.news
