As various U.S. states push back one way or another against prediction markets, Crypto.com no longer offers sports event contracts in at least eight states.
A company spokesperson confirmed to SBC Americas that it is currently not live with sports markets in any of the following jurisdictions:
- Arizona
- Michigan
- Maryland
- Massachusetts
- Illinois
- New Jersey
- Nevada
- Ohio
Event contract cease-and-desists having an impact
Each of those states has in some way decried sports prediction markets and equated the products to illegal gambling without a sports wagering license. Five of them are embroiled in legal action with at least one prediction market company, including Crypto.com in some cases, and some of those five had previously issued cease-and-desist notices to certain operators.
In Nevada, Crypto.com was denied a preliminary injunction against the Nevada Gaming Control Board (NGCB) in October and the company subsequently confirmed that it had stopped offering sports contracts in the state.
Meanwhile, Arizona and Illinois both also issued cease-and-desist notices to prediction market platforms including Crypto.com in the spring. Michigan has not publicly announced any enforcement action against prediction markets but is one of several states that have warned their gaming licensees not to participate in or facilitate sports event contracts. The Michigan Gaming Control Board (MGCB) announced an investigation into the vertical back in April.
Crypto.com’s partnerships under scrutiny
Earlier in December, Arizona informed Underdog of its intention to revoke its fantasy gaming license over the operator’s prediction markets offering in conjunction with Crypto.com in numerous states. That was the first time a state government or gaming regulator had gone as far as license revocation over the issue.
Underdog has offered Underdog Markets in several states since the summer through its collaboration with Crypto.com, although Arizona was not one of them. As of Dec. 16, Underdog’s predictions product is available in 23 states plus D.C.
Fanatics is another major partner of Crypto.com, offering the financial firm’s event contracts in 24 states via its new Fanatics Markets product. There are some differences between where Underdog and Fanatics each offer Crypto.com markets, but neither operator provides prediction markets in the eight states Crypto.com listed to SBC Americas.
Crypto.com still live in other states despite warnings
Other states in which Crypto.com still seems to be active have also issued various communications about sports contracts. For example, Arkansas’ Attorney General’s office issued a formal opinion in October calling sports prediction markets illegal without a wagering license and the Louisiana Gaming Control Board warned its licensed sportsbooks that offering sports event contracts breaks state law and may impact their gaming licenses. In both instances these warnings did not involve enforcement action against any specific prediction markets.
In New York, where the State Gaming Commission (NYSGC) is fighting Kalshi in court, the NYSGC chair said the regulator would review sportsbooks’ suitability for licensure if they partake in prediction markets, and a bill filed in the state Assembly proposes banning many kinds of event contracts. Neither Underdog nor Fanatics offers Crypto.com contracts in New York.
Crypto.com scale-back contrasts with Kalshi claims
In halting sports contracts in several states, Crypto.com stands in notable contrast to its fellow Coalition for Prediction Markets member Kalshi, which continues to insist that it not only has the right to offer sports in all 50 states but that it cannot geolocate on a state-by-state basis.
Kalshi has made such claims in litigation in several states, most prominently in its battle with Massachusetts Attorney General Andrea Campbell and the Massachusetts Gaming Commission. Kalshi Head of Markets Xavier Sottille said in a filing in November that installing geolocation services to geofence out that state would cost tens of millions annually and that it would take months to even negotiate a deal with a geolocation partner. Kalshi has also claimed that the Commodity Futures Trading Commission (CFTC) may revoke its registration status if it restricts usage by location because of the federal regulator’s impartial access rule.
