Crypto.com OG Challenges Washington After Kalshi Ruling

Crypto.com's OG prediction market platform has initiated legal action against the State of Washington in federal court. This move follows Washington's preliminary injunction against Kalshi, a competing prediction market operator. OG is seeking to prevent enforcement actions similar to those imposed on Kalshi, arguing the state's actions pose an imminent threat due to their stance and public declarations.

Washington's Legal Stance on Prediction Markets

The legal dispute began with Washington's July 22 injunction against Kalshi. The state contends that Kalshi's event contracts breach local gambling laws, a claim upheld by the court which dismissed Kalshi's defense of federal preemption. Washington's position was reinforced by its December 2025 advisory categorizing prediction markets as "unauthorized," and by its contributions to multi-state briefs advocating state regulation over these markets. OG's lawsuit asserts these factors indicate a high likelihood of similar enforcement against its operations.

CFTC's Role in Federally Regulated Markets

OG's lawsuit argues that the Commodity Exchange Act authorizes the Commodity Futures Trading Commission (CFTC) to oversee federally regulated prediction markets, conflicting with state-level interventions like those in Washington. OG highlights a CFTC order from July 14, which required Kalshi to maintain trades for Michigan residences despite a state ruling to unwind them. OG claims such state-enforced actions clash with federal regulations that emphasize impartial market access and consistent trading practices.

The Commercial Value of Sports Event Contracts

OG's legal arguments also address the broader economic impact of sports event contracts, deeming them legitimate financial tools beyond mere speculation. The lawsuit explains that various businesses benefit financially from such contracts, using them to hedge against commercial risks. Beneficiaries include:

• Broadcasters reliant on audience-based advertising revenue
• Retailers dealing in team merchandise
• Hotels and travel agencies experiencing demand shifts during sporting events
• Restaurants and bars near venues
• Companies orchestrating sports-centric promotions
• Fantasy sports platforms and data providers dependent on fan activity

According to OG, these industries illustrate how businesses leverage event contracts to mitigate financial exposure linked to sporting events.

Seeking a Judicial Declaration

OG has petitioned the federal court to rule Washington's enforcement actions as unlawful, aiming to permanently prohibit state authorities from targeting its event contracts. The outcome of this case could significantly impact the future regulation and operation of prediction markets across the U.S.