Crypto.com’s OG Sues Washington After Kalshi Injunction
The prediction market operators filed a preemptive federal lawsuit days after Washington secured a preliminary injunction against Kalshi.
Crypto.com’s prediction market platform, OG, has sued the State of Washington in federal court. The operator seeks to block the state from taking an enforcement action after a Washington judge granted officials a preliminary injunction against Kalshi.
OG argues that the court victory and repeated public statements demonstrate an imminent threat that regulators will pursue similar claims against its federally regulated exchange.
Lawsuit Follows Washington’s Kalshi Victory
The complaint was filed on July 22, two days after the Kalshi ruling. The state court found Washington was likely to succeed on its claims that Kalshi’s event contracts violate state gambling laws. The judge also rejected the operator’s federal preemption arguments.
The complaint also cites Washington’s December 2025 guidance declaring prediction markets “unauthorized,” public statements describing the platform as illegal gambling and the state’s participation in multi-state briefs supporting state authority to regulate prediction markets.
Together, OG says those actions create a “concrete and imminent threat” that Washington will bring a similar enforcement action against the company.
Complaint Highlights CFTC’s Michigan Order
The lawsuit repeats the familiar argument that the Commodity Exchange Act gives the Commodity Futures Trading Commission (CFTC) exclusive authority over federally regulated prediction markets.
Unlike earlier prediction market lawsuits, however, the complaint places unusual emphasis on the CFTC’s recent intervention in Michigan. The complaint repeatedly cites the CFTC’s July 14 emergency order directing Kalshi to honor trades involving Michigan customers after a state court ordered those positions unwound.
According to OG, that order demonstrates how state-by-state enforcement conflicts with the federal regulatory framework governing designated contract markets.
The company argues the CFTC has already concluded that forcing exchanges to unwind trades or restrict participants based on individual state actions could distort markets. It would also conflict with federal obligations requiring impartial market access and orderly trading.
OG Defends Commercial Uses of Sports Event Contracts
The lawsuit also devotes significantly more attention than previous prediction market cases to explaining why sports event contracts allegedly serve legitimate commercial purposes beyond speculation.
OG argues that sports event contracts are legitimate financial instruments that businesses can use to hedge commercial risk. To support that argument, the company lists several examples of businesses it says could benefit from sports event contracts, including:
- Broadcasters whose advertising revenue depends on viewership.
- Retailers selling team merchandise.
- Hotels and travel companies that experience demand spikes around major sporting events.
- Restaurants and bars located near stadiums and arenas.
- Companies running sports-related promotional campaigns.
- Fantasy sports operators and sports data providers whose revenues fluctuate based on fan engagement.
These are just a few examples, but they underscore a broader point,” the complaint states. “Many businesses across diverse industries have meaningful financial exposure to the occurrence, non-occurrence, or extent of occurrence of events or contingencies connected to sporting events and may seek to manage that risk through event contracts.”
The company is asking the federal court to declare Washington’s enforcement efforts unlawful. It also seeks to permanently prohibit state officials from pursuing enforcement actions against OG or its event contracts.
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