Judge Orders Crypto.com to Halt Nevada Prediction Markets Immediately
UPDATE: A U.S. federal judge has mandated that Crypto.com must cease its sports prediction markets in Nevada effective Monday, delivering a significant blow to the crypto platform’s expansion plans nationwide. The ruling comes after the Nevada Gaming Control Board (NGCB) accused the company of operating sports betting without a license, violating state law.
Judge Andrew P. Gordon of the U.S. District Court for Nevada rejected Crypto.com’s plea for a preliminary injunction, which would have allowed them to continue operations while the legal battle unfolded. The court’s decision requires Crypto.com to block all Nevada residents from accessing its sports markets or face substantial penalties.
The conflict began on May 20, 2023, when the NGCB issued an order against Crypto.com, leading the company to file a lawsuit in June. Crypto.com argued that its event contracts should be classified as “swaps,” a financial instrument overseen by the CFTC, rather than bets falling under Nevada’s gaming regulations. However, Judge Gordon dismissed this argument, stating that these contracts depended on the outcomes of sports events, not quantifiable financial data.
Industry analysts were taken aback by the ruling, particularly given that Judge Gordon previously permitted another platform, Kalshi, to continue offering prediction markets in Nevada. This disparity could prove pivotal as Crypto.com prepares to appeal the decision to the Ninth Circuit Court.
The NGCB reaffirmed its stance last week, insisting that any entity facilitating bets on real-world events must possess a Nevada non-restricted gaming license. Officials emphasized the importance of stringent regulatory oversight to safeguard the integrity of the state’s gambling sector.
As it stands, Nevada gamblers are now unable to access Crypto.com’s sports prediction markets, intensifying the legal struggles the company faces. Despite this setback, Crypto.com remains resolute in pursuing its case at the federal level, indicating plans for an appeal.
This ruling underscores the growing complexities surrounding the regulation of prediction markets in the U.S. As the legal landscape evolves, the outcome of Crypto.com’s appeal could have far-reaching implications for the future of crypto-based betting platforms across the country.
With the legal battle poised to escalate, all eyes are on the Ninth Circuit as Crypto.com gears up for its next move in this high-stakes fight. The outcome could reshape the regulatory framework surrounding sports betting and prediction markets in the United States.
