Crypto.com to Stop Nevada Sports Prediction Markets Due to Legal Fight

The Nevada Gaming Control Board has said that Crypto.com will suspend its Nevada sports event contracts pending a federal court appealImage Source: Shutterstock.com

Crypto.complans to stop its sports event prediction market activities in Nevadaon November 3, after a recent federal court rulingagainst the company. This move marks a big step in an ongoing legal fightabout whether sports-based prediction contracts fall under federal commodities law or Nevada’s tough gambling rules.

Nevada Orders Crypto.com to Suspend Sports Betting Contracts Pending Appeal

The Nevada Gaming Control Board (NGCB) said on Friday that Crypto.com has agreed to stop offering or maintaining sports event contracts for people in the state while the company appeals a federal court decision from earlier this month. US District Judge Andrew P. Gordonhad said no to Crypto.com’s request for a temporary order that would have let it keep running while fighting the state’s enforcement actions.

Crypto.com claimed its event contracts should be labeled as regulated “swaps” under the Commodity Futures Trading Commission’s (CFTC)watch, not as bets that fall under state gambling rules. Judge Gordonhad given this protection to another platform, Kalshi, but chose not to do the same for Crypto.com. This decision has created a divide that legal experts think will be a central point in the appeal.

In its notice to Nevada licensees, the NGCBstated again that prediction markets based on sports, entertainment, or political outcomes are seen as wagering under state law even if they are traded on CFTC-regulated exchanges. Enforcement counsel Edward Dreitzerexplained that contracts linked to events like professional sports games, the World Series of Poker, or the Oscars are considered forms of betting. Only entities with a Nevada non-restricted gaming license and sportsbook approval can offer these.

Crypto.com’s Legal Battle Highlights Growing Tension Between Prediction Markets and State Betting Rules

The regulator stressedits dedication to keeping Nevada’s gaming environment under tight control. Dreitzerpointed out that the Board’s job involves protecting the industry’s integrity and making sure all operators follow laws. These laws aim to safeguard the state’s economic stability and reputation.

Crypto.com’s suspensionof its Nevada operations is the first time a CFTC-regulated exchange has stopped activities in one state because of a clash over jurisdiction. Earlier this year, we saw something similar when Robinhood stopped offeringits sports-related contracts through Kalshi.

The legal fight involving Crypto.comhas caught more eyes as prediction markets and traditional sports betting frameworks start to overlap. Kalshikeeps running under temporary court protection for now. However, the Nevada Resort Associationand other industry groups have cautioned that letting unlicensed platforms work like sportsbooks could shake up years of steady regulations.

Crypto.comintends to keep pushing its appeal through the Ninth Circuit Court of Appeals. The company stands by its claim that its event contracts are valid financial products, not tools for gambling. However, until the court makes a decision, people in Nevadawill not be able to use the platform’s sports prediction markets.