The Nevada Gaming Control Board (NGCB) has filed its first civil enforcement action against Polymarket, escalating the state’s crackdown on unlicensed prediction markets. The lawsuit, lodged last week in Carson City’s District Court, seeks an injunction to halt Polymarket’s alleged unlicensed wagering operations in Nevada.
This move follows a regulatory battle targeting Polymarket’s rival Kalshi, which has been ongoing since early 2025. While Nevada previously focused on Kalshi, Polymarket has now drawn attention after returning to the U.S. market last year and rebuilding its trading volume.
Why Nevada is Targeting Polymarket
The NGCB is leveraging precedents from its case against Kalshi. In November 2025, Judge Andrew P. Gordon ruled that certain sports-event contracts were “substantively indistinguishable from sports wagering,” giving the state grounds to treat similar contracts as unlicensed gambling.
Unlike Kalshi, which initially received cease-and-desist letters, Polymarket faces a direct civil enforcement action, potentially covering a broader range of event contracts beyond sports. According to the filing, offering sports or other event contracts constitutes wagering under NRS 463.0193 and 463.01962, requiring a state license.
Kalshi’s Mixed Legal Wins
While Polymarket is under fire, Kalshi secured favorable rulings in other jurisdictions. In Nevada, Chief Judge Gordon issued a partial stay in Kalshi’s ongoing enforcement case, allowing the platform to continue operations while discovery continues. Kalshi argues it falls under CFTC federal oversight, exempting it from state-level restrictions.
Kalshi also gained a Temporary Restraining Order in Tennessee, blocking enforcement of a cease-and-desist by the Tennessee Sports Wagering Council. Similarly, federal courts in New Jersey ruled in Kalshi’s favor, though Maryland courts denied an injunction, creating a circuit split that could reach the U.S. Supreme Court.
Other states, including Massachusetts, Connecticut, New York, Illinois, Arizona, Ohio, and Montana, are also actively pursuing legal action against prediction markets, creating a patchwork of litigation that will shape the future of U.S. prediction trading.
State-by-State Snapshot (as of Jan 19, 2026)
| State | Target(s) | Status |
|---|---|---|
| Nevada | Polymarket, Kalshi, Crypto.com | NGCB sues Polymarket; Kalshi appeals Nov 2025 ruling |
| Tennessee | Kalshi, Polymarket, Crypto.com | TRO granted to Kalshi after Jan 9 cease-and-desist; preliminary injunction hearing Jan 26 |
| New Jersey | Kalshi, Robinhood | Federal appeal ongoing; Third Circuit review underway |
| Massachusetts | Kalshi | State case pending; ruling expected late Feb 2026 |
| Connecticut | Kalshi, Polymarket | Oral arguments for permanent stay scheduled Feb 12 |
| Others | NY, IL, AZ, OH, MT | Active litigation against prediction markets |
Nevada’s lawsuit against Polymarket signals a new front in the prediction market legal wars, raising questions about the interplay between state licensing requirements and federal oversight. With multiple states weighing in and federal rulings pending, the coming months could redefine the regulatory landscape for prediction trading in the U.S.
