Case 2:25-cv-00978-APG-BNW Document 42 Filed 08/04/25 Page 7 of 26
Presentations” contracts. Compl. ¶ 66; Compl. Ex. C, at 1 2 ; see 7 U.S.C. § 7a-2(c)(1); 17 C.F.R. § 40.2(a). These contracts allow users to trade on the outcome of live events in the performing arts, spectator sports, and related industries, provided the users themselves are not participants in the events. Compl. ¶ 66; Compl. Ex. C, at 4–5; Certification Filing, supra note 2, at 4–5. Under the process described above, as a CFTC-designated contract market, CDNA ensured that these contracts adhered to product-related regulatory standards and certified that they complied with applicable law prior to the time of listing. See 7 U.S.C. § 7a-2(c)(1); 17 C.F.R. § 40.2(a). CDNA’s Sports Event Contracts have all been certified and deemed “effective” under this process. See 7 U.S.C. § 7a-2(c); 17 C.F.R. § 40.2(a). C. Defendants Threaten to Enforce State Gaming Law Against CDNA. The NGCB and Nevada Gaming Commission (“NGC”) administer and enforce gaming laws and regulations throughout Nevada. The NGCB establishes and enforces the rules and regulations governing gaming in Nevada, while the NGC acts on recommendations of the NGCB with regard to licensing. 3 Compl. ¶ 21. The NGCB seeks to assert its authority over Sports Event Contracts offered for trading on CDNA based on its view that these contracts violate various provisions of Nevada gaming law. Id. ¶ 70. On May 20, 2025, the NGCB issued a cease-and-desist order to CDNA. Compl. ¶¶ 69– 70; Compl. Ex. A; ECF No. 38 (“Answer”) ¶¶ 69–70. The order asserts that CDNA has been offering, and continues to offer, “event-based wagering contracts in Nevada on sporting events through its exchange” and that this “is unlawful in Nevada, unless and until approved as licensed gaming by the [NGC].” Compl. ¶ 69; Compl. Ex. A, at 1; Answer ¶ 69. The NGCB concluded that “by offering event-based wagering contracts in Nevada, [CDNA] is operating as an unlicensed sports pool in violation of [Nevada law].” Compl. ¶ 70; Compl. Ex. A, at 2; Answer ¶ 70. The 2 CDNA’s January 30, 2025 self-certification pertaining to its Sports Event Contracts is publicly available on the CFTC’s website. Industry Filings, Certification of Contingent Derivatives Contract (Industry Event – Live Presentations – NAICS 711) – Submission Pursuant to Commission Regulation 40.2(a) , CFTC, https://www.cftc.gov/sites/default/files/filings/ptc/25/01/ptc01302514705.pdf (Jan. 30, 2025) (hereinafter “Certification Filing”). 3 Gaming Commission , Nevada Gaming Commission and the Nevada Gaming Control Board, https://gaming.nv.gov/gaming/commission/.
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