A judge in the US state of Nevada has temporarily banned the popular prediction platform Polymarket from offering services to residents of the state. The measure will apply for at least fourteen days and comes at the request of the Nevada Gaming Control Board. The ruling increases the pressure on similar marketplaces that claim to be subject to financial legislation.
Polymarket must shut down operations
The judge authorized a ban on activities of Blockratize, the company behind Polymarket. Until the next hearing on February 11, the platform may not offer contracts linked to sports results or other events.
According to the judge, Polymarket’s products are indistinguishable from traditional betting at this stage of the lawsuit. They would therefore fall under gambling legislation, not financial regulation.
The court emphasized that continuing activities without a permit could cause “irreparable damage.” According to the judge, there is insufficient protection against abuse, such as participation by minors or manipulation of bets.
Federal protection argument rejected
Blockratize defended itself by arguing that Polymarket would fall under the federal Commodity Exchange Act. According to the company, only the CFTC would have jurisdiction. The judge disagreed and stated that states may apply their own gambling laws, even if a platform tries to fall under federal regulatory rules.
The Nevada case is not an isolated case. Also in Tennessee, Polymarket and competitors Kalshi and the Crypto.com platform were ordered to halt sports-related contracts last month. They had to refund users and cancel outstanding transactions.
Supervisors warn of risks
Tennessee regulators explicitly cited consumer protection concerns. For example, the platforms are said to lack age verification and mechanisms for responsible gaming behavior.
Kalshi, which is officially registered with the CFTC, has long been embroiled in lawsuits over the legal status of prediction markets. In some states the platform was vindicated, in others operations were halted. The legal position therefore remains volatile.
Crypto exchange Coinbase is also joining the debate. The company sued regulators from several states in December and hopes that federal judges will clarify: are prediction markets covered by financial law, or are they in fact gambling sites?
The ruling in Nevada makes it clear that legal clarity is not yet in sight.
Source: https://newsbit.nl/rechter-in-nevada-dwingt-polymarket-tot-tijdelijke-stopzetting/
