Crypto.com has made significant changes to its operations, withdrawing from several markets, including Arizona, following legal pressure. The Arizona Department of Gaming issued a cease-and-desist letter to the company, prompting not only a cessation of services in that state but also broader cancellations of sports event contracts across Michigan, Maryland, Massachusetts, Illinois, New Jersey, Nevada, and Ohio. Furthermore, Crypto.com has ceased all offerings in New York.
In this strategic maneuver, Crypto.com appears to be adopting a conciliatory approach with state regulators to avoid disputes that could be counterproductive to its business objectives. Despite the withdrawal from these states, Crypto.com is committed to maintaining its presence in prediction markets in other regions and is exploring potential collaborations with companies such as Underdog.
Meanwhile, another player in the market, Fanatics Betting and Gaming, has launched its own prediction market platform, Fanatics Markets. However, it now faces scrutiny from the Arizona Department of Gaming, mirroring the circumstances that led to Crypto.com’s retreat. Given that Fanatics is also a partner of Crypto.com, the regulatory response to its activities remains uncertain, particularly since the two companies appear to face similar challenges from state authorities.
In contrast to Crypto.com’s compliance-first strategy, rival company Kalshi has taken a more aggressive stance against legal challenges. Kalshi has aimed to redefine regulatory interpretations of prediction markets, especially those related to sports, and has managed to secure stays in unfavorable rulings, pushing its case through higher legal channels.
As the prediction market is projected to reach $10 billion, the landscape of sports betting continues to evolve, with various companies observing how regulators will treat these new market entrants. Despite the current setbacks experienced by Crypto.com, the overall interest and investment in prediction markets suggest that many companies remain determined to expand their foothold in this emerging vertical.
