Polymarket Temporarily Barred from Nevada as Legal Fight Escalates

TLDR

• Nevada court temporarily halts Polymarket from offering sports and event contracts to state residents.
• The court grants a 14-day temporary restraining order while awaiting a hearing on February 11.
• Polymarket argues that its contracts fall under federal jurisdiction, but the court disagrees.
• Nevada regulators claim Polymarket’s unlicensed operations undermine the state’s strict gaming regulations.
• The court emphasizes the immediate harm caused by Polymarket’s actions to Nevada’s regulatory structure.

A Nevada state judge has temporarily blocked Polymarket from offering sports and event contracts to state residents. This decision follows a request from state regulators to halt Polymarket’s operations while the legal battle continues. The court will hold a hearing on the matter on February 11, after granting a 14-day temporary restraining order.

Court Ruling Temporarily Stops Polymarket Operations

Judge Woodbury of the Nevada court granted a temporary restraining order, halting Polymarket’s activities in the state. The court’s decision comes after Nevada’s gaming regulators raised concerns about Polymarket’s unlicensed status. State regulators claim that Polymarket’s operations violate Nevada’s strict licensing standards.

The court’s ruling was based on the argument that Nevada’s regulatory structure could be undermined by unlicensed operators. “The resulting harm in evasion of Nevada’s ‘comprehensive regulatory structure’ is immediate, irreparable,” the judge said. Polymarket’s activities were deemed to pose a risk of eroding Nevada’s tightly controlled gaming environment.

Polymarket contends that its contracts fall under federal oversight, arguing that the Commodity Futures Trading Commission (CFTC) should have exclusive jurisdiction over its operations. The company claims it operates as a federally designated contract market. Polymarket emphasized that its activities are subject to federal law, not state law, and should be regulated accordingly.

However, the court did not find Polymarket’s federal preemption argument convincing. Judge Woodbury noted that the legal question of federal preemption in this case remains evolving. “The balance of convincing legal authority weighs against federal preemption in this context,” Woodbury stated.

Nevada’s Regulatory Concerns

Nevada’s gaming board expressed concerns that Polymarket’s unlicensed status could result in a lack of proper oversight. One of the primary issues highlighted by the board was the platform’s potential to allow wagers from individuals who could influence event outcomes. Additionally, regulators pointed out the challenge of preventing underage participants from buying event contracts.

Polymarket’s defense focused on its operations as a financial platform, not a gambling one. The company argued that the contracts it offers are not traditional bets on sports events. However, the court sided with Nevada’s argument that the state’s gaming regulations must be followed when offering such services to its residents.

The post Polymarket Temporarily Barred from Nevada as Legal Fight Escalates appeared first on CoinCentral.