Nevada sues Polymarket over alleged unlicensed sports wagering

Nevada gaming regulators have filed a civil enforcement lawsuit against prediction market platform Polymarket, accusing the company of offering illegal, unlicensed sports wagering in the state, according to a court filing.

The Nevada Gaming Control Board said it lodged the lawsuit in Carson City District Court seeking a court declaration and an injunction to halt Polymarket’s sports event contracts within Nevada.

Regulators allege the contracts amount to unlicensed wagering and violate state gaming laws aimed at protecting the integrity and economic stability of Nevada’s gambling industry.

The legal action marks a shift in enforcement strategy by the board, which said previous cease-and-desist orders issued to prediction market operators had proven ineffective. According to the regulator, those orders were ignored after platforms argued they were regulated at the federal level and therefore not subject to state gaming laws.

The lawsuit is the first direct legal challenge by Nevada regulators against Polymarket, which recently re-entered the U.S. market following approval from the Commodity Futures Trading Commission (CFTC).

Legal experts expect Polymarket to seek to move the case to federal court, arguing that prediction markets fall under federal jurisdiction. Nevada, however, has previously succeeded in defending state authority in similar disputes, with past rulings under Chief Judge Andrew Gordon favouring state regulators.

The case differs from ongoing litigation involving Kalshi, where conflicts between federal and state oversight are more central. Nevada is the second state to pursue a state-court lawsuit against a prediction market, following Massachusetts’ action against Kalshi last September.

Several U.S. states that allow regulated sports betting have raised concerns that prediction markets offering sports-related contracts are effectively operating as sportsbooks without state licences. A ruling in Nevada’s favour could encourage other states to pursue litigation rather than warnings, potentially tightening compliance requirements for prediction market operators across the country.