Crypto.com Withdraws Prediction Market Services in Multiple States
Crypto.com Pulls Back Amid Regulatory Pressure
Crypto.com has recently announced its withdrawal from several state markets, including Arizona, in response to increased regulatory scrutiny. This move follows a cease-and-desist order from the Arizona Department of Gaming targeting its prediction market offerings.
State-by-State Exit and Strategic Realignment
On December 12, Crypto.com ceased its prediction market services in Arizona and discontinued related sports event contracts in Michigan, Maryland, Massachusetts, Illinois, New Jersey, Nevada, and Ohio. Additionally, the company is no longer providing any services in New York. Rather than contesting these regulatory challenges, Crypto.com has opted for a more conciliatory approach, focusing on maintaining its operations where feasible without engaging in prolonged legal conflicts.
Ongoing Operations and Potential Partnerships
Despite withdrawing from some markets, Crypto.com continues to offer sports event contracts in other states and is exploring new strategic collaborations, including potential partnerships with platforms like Underdog. These moves indicate the company’s interest in sustaining its presence in the prediction markets sector through alternative avenues.
Other Industry Players Also in Regulatory Spotlight
Fanatics Betting and Gaming, another key player with its own prediction market branch named Fanatics Markets, may also face regulatory challenges similar to those encountered by Crypto.com. Fanatics collaborates with Crypto.com, and regulatory bodies may closely examine their operations given the similarities in their market offerings.
Legal Landscape for Prediction Markets
Compared to competitors such as Kalshi, Crypto.com has shown less legal resistance against regulatory actions. Kalshi has actively pursued legal remedies to challenge rulings unfavorable to prediction markets, striving to reshape regulatory interpretations, especially in sports-related markets. In contrast, Crypto.com prefers to comply with existing rulings while awaiting more favorable legal conditions.
Future Outlook in a Growing Market
With estimates projecting the prediction market could reach a valuation of $10 billion, the interest from mainstream sports betting companies continues to grow. Despite current regulatory hurdles, it is expected that companies will persist in developing and asserting their roles within this expanding sector.
