Crypto.com Prediction Market Faces Regulatory Setback, But Battle Far From Over

Core Viewpoint - The legal landscape for prediction market companies in the U.S. appears to be shifting against them, as evidenced by a Nevada federal judge's recent denial of Crypto.com's request for relief from state regulations [1]. Group 1: Legal Proceedings - Crypto.com preemptively sued the Nevada Gaming Control Board in June, seeking a preliminary injunction to prevent the board from imposing regulations or blocking access to its prediction markets for state residents [2]. - Unlike Kalshi, which received a favorable ruling, Crypto.com faced a different outcome as Judge Andrew Gordon denied the injunction [3]. - A member of the Nevada Gaming Control Board expressed confidence in the ruling, indicating a significant victory for state regulators [4]. Group 2: Legal Arguments and Implications - Crypto.com maintains that its contracts are swaps under the exclusive jurisdiction of the Commodities Futures Trading Commission (CFTC), and plans to appeal the ruling [4]. - Legal experts suggest that the distinction made by Judge Gordon between "outcomes" and "occurrences" in sports contracts is not legally significant, arguing that it undermines the basis for the ruling [6][7]. - The Commodity Exchange Act (CEA) is central to the regulatory authority of the CFTC, and the classification of prediction market contracts as swaps is crucial for their legal standing [6].