There is another lawsuit against Maryland Lottery and Gaming over sports contracts, except this time it is from Crypto.com
Similar to the lawsuit filed earlier this month by Kalshi, Crypto.com is seeking the Maryland District Court to intervene after the lottery, which serves as regulator over sports betting and casino gaming in the state, sent a cease and desist to the company, saying its sports event contracts were, in its eyes, unregulated sports betting.
The argument from Crypto.com put forth several of the same arguments Kalshi argued in its claims, namely that the Commoity Futures Trading Commission (CFTC) regulates and oversees these contracts and regulators at the state level have no power to intervene.
Crypto.com says swaps should be open to everyone
However, Crypto.com did add some new elements to the conversation, particularly over the argument that the swap needs to have an economic consequence for the contract holder related to the event.
Congress’s longstanding policy of permitting broad market participation is integral to the healthy functioning of these markets. Restricting financial derivatives to participants with a direct risk in the outcome would diminish liquidity, impair price discovery, and undermine the market’s essential role in allocating and managing risk,” the suit argued.
The suit also noted that both Nevada and New Jersey district courts concluded that an injunction keeping these event contract comapnies online was the prudent decision when it came to Designated Contract Markets (DCM) related to sporting events.
“As the Kalshi court correctly observed, the question is not whether the event contracts listed by a DCM are ‘gaming.’ Rather, the question is whether the entity offering the contracts is a federally regulated DCM that has properly listed the contracts on its market.”
CFTC previously intervened with Crypto.com
While CFTC has yet to take action on sports contracts writ large and recently canceled a planned April 30 roundtable on the topic, earlier this year the CFTC did ask Crypto.com to pull two of its sports-related event contracts.
One was one who will hold league championships, such as the Super Bowl or Stanley Cup winner and the other was on various cities that might host a parade for event winners.
This request came five days before President Donald Trump took office. With the regime change, the changes at CFTC have leaned towards being more open about what kinds of event contracts can be offered.
