Crypto.com No Longer Offers Sport Event Contracts in Arizona, Eight Other States

• Crypto.com pulled its sport event contracts from Arizona on Dec. 2, full prediction markets on Dec. 12
• Crypto.com reported it also does not offer sport event contracts in Michigan, Maryland, Massachusetts, Illinois, New Jersey, New York, Nevada, and Ohio
• This comes after news broke that Underdog will have its Arizona fantasy sports contest license revoked due to its sport event contract offerings and partnership with Crypto.com

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Crypto.com no longer offers its prediction market or sports event contracts in Arizona, having pulled sport event contracts from the state on Tuesday, Dec. 2, and the rest of its prediction markets on Friday, Dec. 12, according to a Crypto.com.

Additionally, a Crypto.com spokesperson reported to Sports Betting Dime it no longer offers sport event contracts in Michigan, Maryland, Massachusetts, Illinois, New Jersey, Nevada, and Ohio. It also does not service New York in any way.

Each of these states have taken umbrage with prediction market companies for their sport event contracts, equating them to illegal sports betting.

Crypto.com Not Offering Sport Event Contracts in Nine States

Each of the nine states where Crypto.com no longer offers sport event contracts have either issued cease-and-desist notices to companies for sport event contracts or are currently embroiled in lawsuits involving prediction markets.

Maryland, Massachusetts, New Jersey, New York, Nevada, and Ohio are all currently involved in lawsuits with prediction market companies stemming from cease-and-desist notices for their sport event contracts.

At the heart of the issue is the key question as to who actually regulates sport event contracts. Companies such as Crypto.com, Robinhood, and Kalshi believe that state regulatory bodies do not have the right to intrude on the government’s “exclusive” authority to regulate prediction markets.

Arizona and Illinois have also sent cease-and-desist notices to the companies regarding their sport event contracts. Michigan has warned licensed operators to not engage or partner with prediction market companies.

Connecticut also issued cease-and-desist notices to Crypto.com, Robinhood, and Kalshi, but Crypto.com still offers its sport event contracts in the state.

But What About Underdog’s Crypto.com Partnership in Arizona?

Crypto.com reported that it pulled its sport event contracts from Arizona on Dec. 2. However, Underdog’s prediction market partnership with Crypto.com led to the Arizona Department of Gaming informing the company on Dec. 5 that it intended to revoke its fantasy sports contest operator license.

It was the first state gaming commission to revoke a gaming license due to a company’s involvement in the prediction markets.

Underdog launched Underdog Markets, its prediction market offerings, in early September after announcing its Crypto.com partnership. The partnership enabled Underdog customers to trade and purchase sport event contracts across all major sports leagues, including the NFL and college football, the first of its kind between a CFTC-registered exchange and a gaming company.

Underdog Markets was never live in Arizona.

However, in a Sept. 15 notice to Underdog, the Arizona Department of Gaming informed the company that “any relationship between the licensee (to include its owners, related entities, principals, agents, or employees) and a person or entity offering, enabling, or selling event contracts in Arizona” will be considered when determining suitability for a license in the state.

“ADG has investigated this matter. It has determined that Crypto continues to operate illegally in Arizona,” Clifford Holden, Arizona Department of Gaming Assistant Director, Certification and Licensing, wrote to Underdog on Dec. 5.

Underdog’s partnership with Crypto.com, and Crypto.com’s offerings of sport event contracts in the state up to Dec. 2, led to the department’s decision to revoke Underdog’s license. Crypto.com’s prediction market services remained in Arizona until Dec. 12.

“ADG has determined that Underdog, by contracting with Crypto, benefitting from Crypto’s services, supporting Crypto’s interests, and providing financial support to Crypto is aiding and abetting Crypto’s illegal conduct in Arizona and providing it with a façade of legitimacy. Moreover, and in the same fashion, Underdog’s relationship with Crypto is an association that poses a threat to the public interest of this State. As a result, the Department hereby provides Underdog notice of its intent to revoke fantasy sports contest operator license FS200008,” a member of the Arizona Department of Gaming wrote in the Dec. 5 notice.

What About Crypto.com’s Fanatics Partnership in Arizona?

Underdog, so far, is the only Arizona gaming operator to have its licensed revoked, yet other operators in the state have similar partnerships with designated contract merchants for prediction markets and sport event contracts.

Fanatics Betting and Gaming has a partnership with Crypto.com, but launched its own prediction market service, Fanatics Markets, on Wednesday, Dec. 3, one day after Crypto.com pulled sport event contracts out of Arizona. It remains to be seen if the Arizona Department of Gaming will seek to revoke Fanatics Betting and Gaming’s sports betting license for its Crypto.com partnership.

Fanatics Markets has never been available in Arizona.

PrizePicks, a licensed fantasy sports operator in Arizona, launched its own prediction market offerings on Nov. 15 through its subsidiary, Performance Predictions II, a federally approved futures commission merchant, and announced a new multi-year partnership with Kalshi. Kalshi offers prediction market and sport event contracts in Arizona.

PrizePicks prediction market contracts are now available in 41 total states, plus Washington, D.C., and include event contracts for sports, entertainment, and pop culture directly in the PrizePicks app. All of Kalshi’s prediction market contracts are available now through the partnership with PrizePicks.

They are not available in Arizona.

When asked if other fantasy sports or sports betting licensees would receive notices of intent to revoke their licenses, an Arizona Department of Gaming spokesperson previously told Sports Betting Dime the department expects “all licensees to follow the law,” but does not comment on potential enforcement matters.

“The department takes its responsibility to regulate gaming in Arizona seriously and regularly evaluates licensee conduct to ensure compliance as part of its regulatory duties. As outlined in previous communications with licensees, we expect all licensees to follow the law. Beyond that, the department does not comment on potential enforcement matters,” the spokesperson said.