Crypto.com Sues Nevada Gaming Board
Crypto.com’s derivatives arm is taking Nevada’s gaming regulators to federal court, trailing Kalshi’s playbook to assert federal authority over sports event contracts.
A Federal Turf War
North American Derivatives Exchange Inc. (CDNA), Crypto.com’s derivatives unit, sued the Nevada Gaming Control Board (NGCB) in U.S. District Court, challenging a May 20 cease-and-desist letter.
The NGCB claimed Crypto.com’s sports event contracts were illegal sports betting, threatening civil and criminal penalties. Crypto.com argues the NGCB oversteps, stating, “NGCB has no authority to regulate, let alone prohibit, derivatives trading offered by a federally regulated designated contract market operating pursuant to federal law.”
The suit mirrors Kalshi’s battle, pitting federal oversight against state gaming rules.
Crypto.com leans on Kalshi’s legal wins. In April, Judge Andrew Gordon granted Kalshi a temporary restraining order against the NGCB, ruling the Commodity Futures Trading Commission (CFTC) holds exclusive jurisdiction over event contracts under the Commodity Exchange Act. Similar rulings in New Jersey bolstered Kalshi’s case. Crypto.com cites these, arguing its CFTC-regulated contracts are legal.
The Stakes of Jurisdiction
Crypto.com’s sports contracts, offered as CFTC-regulated derivatives, let users predict event outcomes. The NGCB insists they’re sports bets, subject to Nevada’s gaming laws. Crypto.com counters that complying with Nevada’s rules, like geo-blocking residents, would violate CFTC’s impartial access mandate.
“It could not possibly comply with Nevada gaming regulations and the CFTC’s core principle of impartial, not location-based, access,” the filing states. The suit seeks a permanent injunction to block NGCB enforcement and a ruling affirming federal preemption, aiming to protect its $6.9 billion fintech business.
The clash reflects growing tension between state gaming boards and federally regulated prediction markets. Kalshi’s suit against the NGCB and New Jersey drew Nevada Resort Association’s intervention, citing competitive threats to its 70 casinos.
Crypto.com faced similar scrutiny, with a CFTC probe into its Super Bowl contracts in February. “We firmly believe in the legality of our events contracts,” Crypto.com told Cointelegraph then.
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