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Crypto.com’s prediction market platform OG has sued Washington Attorney General Nicholas W. Brown, asking a federal court to block the state from enforcing gambling law against its services.
The lawsuit was filed in the U.S. District Court for the Western District of Washington at Seattle, two days after a Washington judge granted a preliminary injunction against Kalshi that will temporarily bar Kalshi from offering sports event contracts in the state.
According to the complaint described in the filing, OG argues its markets are regulated exclusively by the Commodity Futures Trading Commission and that state action would be preempted by the Commodity Exchange Act. OG is seeking declaratory and injunctive relief.
OG’s counsel said Washington’s position creates “a direct and imminent threat to OG’s business and its users” and argued that efforts to stop trading on federally regulated event contracts are preempted by federal law.
The new case follows a separate Washington court ruling involving Kalshi. King County Superior Court Judge John McHale found the state showed a likelihood of success on claims that parts of Kalshi’s offerings violate the Washington Gambling Act, according to the source report. The Washington Attorney General’s Office defines gambling under state law as “staking or risking something of value upon the outcome of a contest of chance or a future contingent event.”
For players, the immediate takeaway is that this is another legal fight over who gets to regulate prediction-market products tied to sports and other events: state gambling regulators or the CFTC. The Crypto.com case does not itself announce a product change, but it shows operators are moving quickly after the Kalshi ruling in Washington.
One date to watch is Aug. 5, when the court is expected to release the final preliminary injunction order in the Kalshi matter. Washington’s response to OG’s lawsuit and any further court action could help clarify how far states can go in challenging federally regulated event-contract platforms.
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Source: As reported by Robert Linnehan.
