A Nevada state judge has temporarily halted Polymarket, an onchain prediction market, from operating in the state, challenging the industry’s argument that federal commodities law overrides state gambling rules. The court granted a temporary restraining order against Blockratize, banning Polymarket from offering event-based contracts to Nevada residents. A preliminary injunction hearing is set for Feb. 11. The order cites Nevada gambling statutes, deeming Polymarket’s sports and event markets as unlicensed wagering.

The judge cited concerns over harm to the state’s ability to regulate betting integrity, underage gambling, and suitability standards if Polymarket continued operating without a gaming license. The court rejected Blockratize’s argument that the Commodity Exchange Act gives exclusive jurisdiction to the CFTC, allowing Nevada to apply its gaming laws. Polymarket has been reached out to for comment.

Nevada joins Tennessee in pushing back against prediction markets. Tennessee’s Sports Wagering Council ordered Polymarket, Kalshi, and Crypto.com’s North American Derivatives Exchange to cease sports event contracts for state residents, arguing they were subject to state gambling regulation. Tennessee regulators highlighted consumer protection gaps in their rationale. Kalshi, a CFTC-designated contract market, has faced legal battles over whether its products are derivatives or illegal gambling.

In a broader clash, Coinbase sued regulators in Connecticut, Illinois, and Michigan in December, seeking federal courts to declare that prediction markets on a CFTC-regulated venue fall under the Commodity Exchange Act and CFTC’s exclusive jurisdiction, rather than state gambling codes. Kalshi has received temporary protection in some jurisdictions, but faced adverse rulings in others, including Nevada and Maryland.

Read more at Cointelegraph: Nevada Court Hits Polymarket with Temporary Restraining Order