Securities Regulation Daily Wrap Up, FEDERAL PREEMPTION—D. Nev.: Coinbase can’t get relief from Nevada state court order on event contracts, (Feb 10, 2026)
Law Firms Mentioned:Snell & Wilmer L.L.P.
Organizations Mentioned:Coinbase Financial Markets, Inc. | Snell & Wilmer, LLP
The procedural tug-of-war is significant because the question of who decides—state or federal courts—could influence thinking on whether federal authorities preempt state gambling laws.
A Nevada federal district court denied injunctive relief to Coinbase in a dispute with Nevada state authorities over Coinbase’s offering of event contracts, which Nevada says constitutes illegal gambling. The court allowed a state court order to stand on procedural grounds, saying it had no power to grant the relief Coinbase sought (Coinbase Financial Markets, Inc. v. Ford, No. 2:26-cv-00256-CDS-MDC (D. Nev. Feb. 7, 2026)).
The ruling is a setback for Coinbase, which seeks to avoid defending against the Nevada enforcement action in state court.
The case is part of sprawling nationwide litigation over whether the trading of event contracts on financial markets constitutes “gambling” under state and tribal gaming laws.
“Unlawful gaming.” Coinbase Financial Markets began operating a predictions market in January 2026, after previously acting as an intermediary for event contracts on the Kalshi trading platform.
The Nevada Attorney General and state gaming authorities obtained a temporary restraining order in state court on February 5 to prevent Coinbase from offering event contracts without obtaining Nevada gaming licenses, as required by state law. The state enforcement action alleges that Coinbase is engaged in unlawful “gaming” under the Nevada Gaming Control Act.
The day before the TRO was granted in state court, Coinbase filed an action in Nevada federal district court to try to prevent Nevada from obtaining such an order.
State court order stands. The federal district court concluded that it had no power to grant the relief sought by Coinbase due to the Younger abstention doctrine and the Anti-Injunction Act.
The court found that all elements were met for the Younger abstention doctrine, which forbids federal courts from staying or enjoining pending state court proceedings if three factors are present. The court found:
The state enforcement action is ongoing;
Important state interests are implicated: the regulation of gaming and protection of the public; and
The state proceeding provides Coinbase adequate opportunity to litigate its claims.
The court further said it would have denied the relief even if the doctrine did not apply, because the Anti-Injunction Act precludes the action. Under that act, a federal court may not grant an injunction to stay proceedings in a state court except “as expressly authorized by Act of Congress, or where necessary in aid of its jurisdiction, or to protect or effectuate its judgments.”
The court pointed to precedent from the Fifth and Ninth Circuits that the Act is “an absolute bar to any federal court action that has the effect of staying a pending state court proceeding,” and that any doubts “should be resolved in favor of permitting the state courts to proceed in an orderly fashion to finally determine the controversy.”
Case dismissed. The court denied Coinbase’s motion and dismissed the complaint.
The case is No. 2:26-cv-00256-CDS-MDC.
Judge: Silva, C.
Attorneys: Alex Fugazzi (Snell & Wilmer L.L.P.) for Coinbase Financial Markets, Inc. Jessica Whelan, Nevada Attorney General's Office, for Aaron D. Ford, Mike Dreitzer, George Assad, Chandeni K. Sendall and Jennifer Togliatti.
Companies: Coinbase Financial Markets, Inc.
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