The Nevada Gaming Control Board has filed a civil enforcement action against Coinbase (NASDAQ: COIN) over its sports ‘event contracts,’ part of its new suite of products, which allow users to bet on a variety of real-world events.
According to the suit, insofar as Coinbase is allowing customers to bet on sporting events in Nevada, it is engaging in a regulated activity under State law. In particular, the law designates a ‘sports pool’—defined as “the business of accepting wagers on sporting events or other events by any system or method of wagering”—as a regulated activity. The Nevada Gaming Control Board argues that Coinbase’s event contracts fall within this definition.
“For example, as of February 1, 2026 a user could buy an event contract for $100 that would pay out $303 if the New England Patriots win the Superbowl – essentially, approximately 3/1 odds,” reads the suit.
The suit also alleges that Coinbase is offering a ‘percentage game,’ also designated as a regulated game under Nevada law. A ‘percentage game’ is defined as a game in which the ‘house’ does not participate in the wager but merely takes a commission from wages placed.
As a result, Coinbase is engaging in regulated activities for which it does not possess a gaming license. The Board is alleging this amounts to four separate violations: for ‘exposing a game for play’ without a license, for allowing users under the age of 21 to place wagers, for receiving compensation for facilitating a wager without a license, and for knowingly accepting a wager from a person inside of Nevada without a license.
The Board is seeking declaratory and injunctive relief, meaning it is asking the court to declare that Coinbase is, in fact, acting illegally and to issue an order prohibiting Coinbase from continuing.
Presumably, if successful, the Board would then begin its own regulatory proceedings against Coinbase. License violations can result in fines in the millions, as well as the forfeiture of illicit profits.
Coinbase began offering prediction markets on a variety of real-world events toward the end of last year. In December, it announced it was acquiring a prediction markets company called The Clearing Company. At the time, Coinbase dubbed itself as accelerating its mission to be an ‘everything exchange.’
“The Everything Exchange will be the unified place where people can trade every asset class. Prediction markets are a natural fit for this vision. Bringing together regulated market access and deep event-contract expertise sets us up to expand power over time, and we’re excited to work with The Clearing Co team to build this next chapter at Coinbase.”
Gambling regulation is primarily left to the States to decide, with a limited number of U.S. States—including Nevada and New York—opting to allow regulated gambling in their jurisdictions. If the Nevada Gaming Control Board is successful in arguing that Coinbase’s offerings amount to regulated gambling, then gaming regulators in other states may follow their lead in taking action against the exchange.
See the Nevada Gaming Control Board’s full filing here.
Watch: How Web3 games will finally go mainstream
Source: https://coingeek.com/coinbase-sued-by-nevada-gambling-regulator-over-sports-wagering/
