Nevada Distrit Court Judge Andrew Gordon turned in a surprising ruling against Crypto.com this week after finding in favor of prediction market competitor Kalshi earlier this year.
Crypto.com filed a lawsuit against the Nevada Gaming Control Board (NGCB) when the regulatory body issued a cease and desist to the company regarding sports-related event contracts. NGCB also did so with Kalshi, which the company challenged in court.
In the Kalshi case, the company requested a preliminary injunction ensuring the company kept sports contracts live in the state while the case proceeded, which Gordon granted.
However, when Crypto.com made a similar request in its case, which was first filed in June, Gordon denied it after hearing from both parties on the matter on Thursday. Gordon also denied a motion for summary judgment.
Gordon entered the denial as a verbal order, but the written order with his rational for denying the request is not available yet.
In the Crypto.com case, while the issue at hand was largely the same, the arguments put forth by the parties did vary. Additionally, while the Nevada Resort Association (NRA) filed an amicus brief in the Kalshi case, it was a group of tribes that filed an amicus brief in the Crypto.com matter.
The group is the same tribal consortium that filed an amicus brief in Kalshi’s case against Maryland regulators. The Maryland case is also the only case to date where a judge has ruled against Kalshi and denied the request for an injunction to keep sports contracts in the state live. That decision is pending appeal in the Fourth Circuit.
In his ruling in the Kalshi case, Godon determined that the Commodities Exchange Act (CEA) superceded state gaming regulations and believed Kalshi stood a good chance to succeed based on the merits of its case.
“Section 2’s plain and unambiguous language grants the CFTC exclusive jurisdiction over accounts, agreements and transactions involving swaps or contracts of sale of a commodity for future delivery that are traded or executed on exchanges that the CFTC has designated…,” wrote Gordon in a ruling granting the request for a preliminary injunction.
“Nevada regulatory agencies thus have no jurisdiction to decide that Kalshi’s conduct violates state law where, at least at present, those activities are legal under federal law.”
As International Masters of Gaming Law (IMGL) President Marc Dunbar noted on an episode of iGaming Daily, as more arguments get filed, judges will start to take closer looks at the interplay between state and federal laws.
