Case 2:25-cv-00978-APG-BNW Document 105 Filed 10/14/25 Page 7 of 27
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because they are CFTC-designated exchanges, only the CFTC can regulate them and state laws are preempted. And that is what happened in this case. On May 20, 2025, the Board sent Crypto a letter stating that the Board was “aware that Crypto.com has been offering, and continues to offer, event-based wagering contracts in Nevada on sporting events on its exchange,” and that “offering event-based wagering contracts is unlawful in Nevada, unless and until approved as licensed gaming by the Nevada Gaming Commission.” ECF No. 15-4 at 2. According to the Board, Crypto was operating as an unlicensed sports pool and thereby violating Nevada law, including Nevada criminal law. Id. at 3. The Board stated that if Crypto continued to offer event contracts after receipt of this letter, that conduct would be “considered willful violations of Nevada law.” Id. Crypto thereafter filed this lawsuit and moved for a preliminary injunction seeking to enjoin the Board and the Nevada Attorney General from pursuing civil and criminal penalties against Crypto. In another case involving a different DCM, I granted an injunction based on my preliminary conclusion that the Board was likely field preempted from regulating the event contracts offered by that DCM, KalshiEX, LLC (Kalshi). KalshiEX, LLC v. Hendrick , No. 2:25- CV-00575-APG-BNW, 2025 WL 1073495, at *6 (D. Nev. Apr. 9, 2025). The District of New Jersey reached a similar conclusion. KalshiEX LLC v. Flaherty , No. 25-CV-02152-ESK-MJS, 2025 WL 1218313, at *5 (D.N.J. Apr. 28, 2025). But the District of Maryland concluded the opposite and held that Maryland state gaming laws were not preempted and therefore the Maryland state gaming authorities could regulate event contracts on Kalshi’s exchange. KalshiEX LLC v. Martin , No. 25-CV-1283-ABA, --- F. Supp. 3d ----, 2025 WL 2194908, at *13 (D. Md. Aug. 1, 2025). Both the District of New Jersey and District of Maryland’s orders have
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