Crypto.com, a North American Derivatives Exchange, has sued the Nevada Gaming Control Board (NGCB) in a federal court. Crypto.com is fighting the NGCB’s attempt to stop it from offering special financial contracts related to sports.
Crypto.com offers contracts where people can bet on things like sports outcomes, but these are regulated by a federal agency called the Commodity Futures Trading Commission (CFTC) under a law called the Commodity Exchange Act.
Crypto.com says the CFTC is the only one allowed to control these contracts. However, the NGCB, which oversees gambling in Nevada, claims these contracts are like sports betting and should follow Nevada’s gambling rules.
Crypto.com disagrees, saying the NGCB is wrong and has no power to stop them because federal law takes priority. The firm is asking the court to settle this and stop Nevada from interfering.
“The NGCB has no authority to regulate, let alone prohibit, derivatives trading offered by a federally regulated DCM,” the complaint states.
The lawsuit follows a May 20 cease-and-desist letter from the NGCB, threatening criminal and civil penalties if Crypto.com continued offering sports event contracts to Nevada residents.
As per the reports, Crypto.com is saying that if they follow Nevada’s rules, like blocking users in Nevada from accessing their sports-related contracts, they would be breaking federal rules set by the Commodity Futures Trading Commission (CFTC). The CFTC says everyone should have equal access to these markets, no matter where they are.
If Crypto.com blocks Nevada users, it could seriously hurt their business in a way that’s hard to fix. They also point to recent court decisions involving another company, KalshiEX. In those cases, judges ruled that the CFTC’s federal authority is more important than state gambling laws, meaning states like Nevada can’t control these contracts.
Crypto.com is using these examples to argue that Nevada should not be allowed to interfere. These decisions, in Nevada and New Jersey, upheld the federal regulator’s exclusive control over such financial instruments.
The exchange seeks a permanent injunction to stop Nevada from enforcing its gaming laws against these contracts and a declaratory judgment confirming federal preemption.
