Crypto.com will stop offering sports event contracts in Nevada by next Monday, Nov. 3, following a court ruling banning the contracts, the Nevada Gaming Control Board wrote to industry stakeholders Friday. In a written explanation of an announced decision, U.S. District Court Judge Andrew P. Gordon Oct. 14 denied Crypto.com’s request for an injunction against the state.
So far, two federal courts have banned a prediction market from operating within a state’s borders. In Maryland, in which a district judge ruled that Kalshi must stop offering sports event contracts, the state agreed to allow it to continue until there is resolution in the court case.
Nevada state officials did not agree to the same setup, and Crypto.com will have to pull down its sports event offerings until its current appeal is resolved. According to letter, posted on X by The Nevada Independent‘s Howard Stutz late Friday afternoon, “Crypto.com will no longer hold open positions in sports event contracts for Nevada residents and will not permit new contracts to be opened.”
Crypto.com will have to geofence
To meet the terms of the order, Crypto.com will have to geofence the state of Nevada to keep its offerings out. The issue of geofencing has come up in Kalshi’s cases against states and tribes many times, as the company has called the cost of geofencing out certain states or Indian reservations prohibitive. Digital sports betting companies, however, are required to have geofences to separate legal and non-legal states or to keep wagering platforms off federal land.
“If a prediction market chooses to adopt geolocation voluntarily, they gain the same protections and the added benefit of deep location-based insights to fight fraud and strengthen their business,” a GeoComply spokesperson told InGame via email.
“GeoComply works with companies of all sizes across a wide range of industries. Fraud prevention and compliance should never be viewed as a barrier to entry. It is an investment in consumer protection, regulatory trust, and long-term sustainability. Our customers consistently find that the value our tools deliver far outweighs the cost of implementation.”
Suitability at risk
In early October, the NGCB sent a letter to licensees saying that it considers the offering of sports event contracts to be a violation of state law, and that it reserves the right to “call into question” a licensee’s suitability should it offer the contracts in Nevada, partner with an entity offering sports event contracts in Nevada, or offer or partner with an entity offering such contractions in violation of another state’s wagering laws.
Though Crypto.com will have to pull down its markets, Kalshi can continue to offer sports event contracts in Nevada, as Gordon previously granted Kalshi an injunction against the state. He did not offer a direct explanation for the decision to ban Crypto.com’s offerings but not Kalshi’s, but he also addressed the definition and issue of “swaps” in the Crypto.com decision but not the Kalshi decision. In essence, Gordon wrote that he considers an event, like a football game, to fall under the definition of a “swap,” but he does not consider the result of the event to meet the same definition.
Either way, the NGCB will be tasked with enforcing the court order for Crypto.com to shutter in Nevada. The company has many partnerships in sports from the Los Angeles Kings and Philadelphia 76ers to UFC to the Champions League. It is also partnered with Underdog as a tech partner to offer sports event contracts. Underdog, which does not operate in Nevada, offers limited prediction market options on its app.
The NGCB reiterated in its letter Friday that “entities with unrestricted gaming licenses with sports pool approval” are the only ones legally allowed to do business in the state.
Prediction markets have disrupted the digital sports betting landscape since January, when Kalshi first offered sports event contracts. Since then lawmakers in at least six states have sent the company cease-and-desist letters, and Kalshi has answered four of those with federal lawsuits.
New York’s regulator sent Kalshi a cease-and-desist letter Friday, and the company responded by Monday morning seeking an injunction against it. The company is also in federal court with a group of three California tribes, and the Wisconsin Ho-Chunk Tribe, and state court with the Massachusetts attorney general. Those entities sued Kalshi to keep it from offering its products on their land.
