Crypto.com Prediction Exchange OG Sues Washington State Over Gambling Laws
North American Derivatives Exchange Inc., operating as OG Prediction Markets and Crypto.com | Derivatives North America, filed a federal lawsuit Wednesday in the Western District of Washington to prevent state officials from applying gambling laws to its event contracts. The exchange named Washington Attorney General Nick Brown and members of the Washington State Gambling Commission as defendants.
The lawsuit comes as a preemptive move, not in response to an enforcement action. OG argues that Washington’s public stance against event contracts and its July 20 injunction against Kalshi create a “concrete and imminent threat” that regulators will target the exchange next. Washington has maintained since December 2025 that offering or participating in event-contract markets is unauthorized within the state.
OG asks the court to declare Washington’s gambling laws unconstitutional and preempted by federal commodities law, and seeks a permanent injunction barring enforcement. The exchange contends that the Commodity Futures Trading Commission (CFTC) has exclusive jurisdiction over transactions on designated contract markets, overriding state laws.
The complaint heavily relies on the CFTC’s July 14 intervention in Michigan, where the agency blocked Kalshi from cancelling previously executed sports contracts after a state court ordered them voided. The CFTC argued forced unwinding could distort prices and undermine confidence in completed derivatives transactions.
OG also argues that sports contracts serve commercial hedging purposes for broadcasters, retailers, and hospitality businesses, though it does not identify any current users. The exchange previously sued Nevada regulators in September 2025 after a cease-and-desist order, and later filed a similar complaint against New York. It is the second operator to sue Washington on imminent-threat grounds, after Robinhood.
Washington’s state court ruled against Kalshi, finding the Commodity Exchange Act does not prevent states from enforcing illegal gambling laws. Federal courts remain divided, with the Third Circuit shielding Kalshi in New Jersey while other courts have allowed local restrictions. Gambling attorney Daniel Wallach noted states have won 19 of 23 preliminary injunction decisions in prediction-market cases.
OG’s lawsuit extends the federal-state jurisdictional battle to Crypto.com’s expanding prediction-market business, seeking federal protection before Washington repeats its enforcement strategy against Kalshi.