Crypto.com has pulled its sports event contracts from at least nine states across the United States amid increasing legal and regulatory pressure. This decision follows a series of enforcement actions, cease-and-desist notices, investigations, and disputes specifically targeting prediction markets associated with sports outcomes. A spokesperson for the company confirmed to various media outlets that its sports markets are currently inactive in Arizona, Michigan, Maryland, Massachusetts, Illinois, New Jersey, Nevada, and Ohio, and it does not provide services in New York.
In Arizona, the company discontinued its sports event contracts on December 2, and subsequently removed its other prediction market offerings by December 12. While enforcement actions in these states have often equated these prediction markets to illegal sports betting without proper licensing, several states have issued formal cease-and-desist notices or are involved in litigation concerning prediction market operators.
Legal challenges have been particularly intense in Nevada, where the Nevada Gaming Control Board denied Crypto.com a preliminary injunction in October, leading the company to cease its sports contracts in that state. Additionally, both Arizona and Illinois issued cease-and-desist notices earlier in the year. Although Michigan has not formally initiated legal action, officials have warned licensed operators against engaging in or facilitating sports event contracts and announced an investigation in April.
Furthermore, states such as Maryland, Massachusetts, New Jersey, New York, Nevada, and Ohio are currently entangled in legal disputes with prediction market firms following cease-and-desist actions. Connecticut has also sent cease-and-desist notices to Crypto.com, along with Robinhood and Kalshi, though Crypto.com continues its prediction market operations there.
In Arizona, the enforcement actions have extended to licensed partners of Crypto.com. The Arizona Department of Gaming issued a notice on December 5 to revoke Underdog’s fantasy sports contest operator license due to its partnership with Crypto.com concerning prediction markets. An official clarified that while the notice of intent is subject to an administrative appeal process, Underdog remains authorized to operate daily fantasy sports contests pending the outcome. The Arizona Department of Gaming has indicated that any associations with entities offering prediction markets will be scrutinized to ensure compliance with regulatory standards.
As of mid-December, Underdog has made its prediction product available in 23 states plus Washington, D.C., though it has never been active in Arizona. Fanatics Betting and Gaming, which collaborates with Crypto.com, operates Fanatics Markets available in 24 states, but also excluding those where Crypto.com has ceased operations.
In stark contrast, fellow Coalition for Prediction Markets member Kalshi has cited the inability to geofence by state in recent court filings, expressing concerns over the financial burdens of tens of millions of dollars annually and issues related to Commodity Futures Trading Commission access regulations. The unfolding situation reflects a complex regulatory landscape as states navigate the burgeoning world of prediction markets and their potential implications for traditional sports betting frameworks.
