A Nevada state judge has imposed a temporary halt on Polymarket, preventing the platform from offering sports and event contracts to residents of the state. This decision follows a request from state regulators concerned about the legality of Polymarket”s unlicensed operations. The court has granted a 14-day temporary restraining order, with a hearing set for February 11.
Judge Woodbury of the Nevada court ruled in favor of the state”s gaming regulators, who argued that Polymarket”s lack of a license poses a significant risk to Nevada”s stringent gaming regulations. The judge articulated that the immediate harm caused by Polymarket”s operations threatens to undermine the state”s comprehensive regulatory framework. “The resulting harm in evasion of Nevada”s “comprehensive regulatory structure” is immediate, irreparable,” Judge Woodbury stated.
In its defense, Polymarket contended that its contracts should fall under federal jurisdiction, claiming oversight by the Commodity Futures Trading Commission (CFTC). The company asserts that it operates as a federally designated contract market, thus should be regulated by federal law rather than state law. However, the court found this argument unpersuasive, noting that the issue of federal preemption remains a complex legal question.
Nevada regulators have raised alarms regarding Polymarket”s unregulated status, highlighting concerns about potential oversight failures. One critical issue identified is the platform”s capability to facilitate wagers from individuals who might influence the outcomes of events. Additionally, regulators expressed challenges in preventing underage users from purchasing event contracts.
Polymarket has maintained its position that its platform functions as a financial service rather than a gambling entity, arguing that its offerings do not constitute traditional betting on sports events. Nonetheless, the court sided with Nevada”s assertion that compliance with state gaming regulations is essential for any such services provided to its residents.
