The Nevada Gaming Control Board announced on Friday that Crypto.com, a digital prediction market provider currently in a legal contest with the state, will stop offering contracts for sports events to residents of the state starting November 3.

This action is a result of a prior decision by U.S. District Judge Andrew P. Gordon, who on October 14 rejected Crypto.com’s request for a preliminary injunction that aimed to prevent the Board from enforcing state laws concerning its operations. The company has stated its intention to appeal this ruling.

The Board’s announcement, shared by its chair, Brittnie Dreitzer, disclosed that Crypto.com will suspend all activities related to sports event contracts within the state as the legal case continues. “This means Crypto.com will no longer have open positions in sports event contracts for Nevada residents, nor will it allow for the initiation of new contracts,” Dreitzer explained.

She emphasized that the Board “is committed to its responsibility of maintaining the safety, morality, public order, and general welfare of the state’s residents, fostering the stability and success of gaming, and preserving the competitive economy as well as free competition policies within Nevada.”

The agency reiterated its previous guidance to licensed operators, clarifying that sports event contracts are categorized as wagering under state law. “The Board views sports event contracts, along with various other event contracts, as wagering activities under (state law),” Dreitzer stated. “Wagering occurs regardless of whether the contract is traded on an exchange supervised by the Commodity Futures Trading Commission or elsewhere.”

As noted in the announcement, this encompasses contracts based on the results or partial results of sports and athletic events, along with additional events such as the World Series of Poker, the Oscars, esports contests, and political elections.

Dreitzer indicated that such services can only be conducted in Nevada if the operator possesses a nonrestricted gaming license with sports pool authorization and complies with all sports wagering regulatory prerequisites, including accepted wagering accounts and sportsbook systems.

“If a Nevada licensee opts to provide sports and other event contracts in Nevada or chooses to collaborate with other entities offering sports and event contracts in the state, the Board will evaluate these developments when assessing the entity’s suitability to retain a Nevada gaming license,” Dreitzer stated.

She cautioned that licensees engaging in similar practices in other states without adherence to those states’ regulations could face disciplinary measures under Nevada’s Gaming Control Act.

Participating in illegal wagering or associating with entities engaged in such activities “can undermine the good character and integrity” of a licensee, Dreitzer remarked, urging all operators to ensure compliance across different jurisdictions.

Crypto.com’s operations in Nevada are challenged by legal problems affecting prediction market providers nationwide. Entities like Crypto.com and Kalshi contend that their operations come under the jurisdiction of the Commodity Futures Trading Commission (CFTC) and are safeguarded by federal legislation, particularly the Commodity Exchange Act. However, numerous states, including Nevada, assert that these event-based contracts equate to gambling based on state laws.

The CFTC has granted conditional approvals to prediction markets, encouraging companies to expand partnerships and re-enter the U.S. market under regulatory frameworks. Crypto.com had established agreements to facilitate markets in various states through partnerships with companies like Underdog.