- U.S. District Judge Andrew P. Gordon ordered Crypto.com to halt its sports event contracts in Nevada.
- Gordon ruled the contracts are governed by state gambling laws, not federal commodities regulations.
- The case underscores ongoing legal battles over how prediction markets should be regulated.
LAS VEGAS – Crypto.com will halt sports event contracts in Nevada starting Monday, following a federal court ruling that denied the company’s request for legal protection while it challenges state regulators.
U.S. District Judge Andrew P. Gordon rejected Crypto.com’s motion for a preliminary injunction on Oct. 14. The Nevada Gaming Control Board confirmed Friday that the prediction market operator must cease all sports contract activity in the state until its appeal is resolved.
NGCB Chairman Mike Dreitzer wrote in a letter to licensees that Crypto.com will no longer hold open positions in sports event contracts for Nevada residents and will not permit new contracts to be opened.
Court Rulings Create Market Uncertainty
The ruling marks the second time a federal court has blocked a prediction market from operating within state borders. Maryland issued a similar order against Kalshi but allowed continued operations during litigation. Nevada officials declined to offer the same arrangement.
Gordon’s decision surprised industry observers because he previously granted Kalshi an injunction in August. In that ruling, he determined federal commodities law superseded state gaming regulations.
Different Outcomes for Competing Companies
However, Gordon ruled differently on Crypto.com’s contracts. He found the company’s event contracts do not qualify as swaps under Commodity Futures Trading Commission jurisdiction, making them subject to state gambling laws.
Crypto.com filed notice Oct. 24 that it would appeal to the Ninth Circuit Court of Appeals. Until then, the company must implement geofencing technology to block Nevada sports betting sites from accessing its platform.
The NGCB has maintained that sports event contracts constitute wagering under state law, regardless of federal commodities oversight. The board warned licensees that offering such contracts or partnering with entities that do could jeopardize their gaming licenses.
The dispute reflects broader tensions as prediction markets expand into legal sports betting territories. Kalshi has filed federal litigation in four jurisdictions, including a recent effort against New York regulators, and has been subject to cease-and-desist orders in at least six states.
Crypto.com maintains partnerships with major sports organizations including the Los Angeles Kings, Philadelphia 76ers, and UFC. The company also partners with Underdog as a technology provider for sports event contracts.
