Missouri’s crackdown on sports prediction contracts is now facing two federal court challenges, with operators linked to Crypto.com and Novig pushing back against state efforts to treat the products as unlicensed gambling.
TL;DR: Two companies filed lawsuits on October 16 after receiving Missouri cease-and-desist letters. Their central argument is that federally regulated event contracts fall under CFTC oversight, but the courts have not resolved that question.
Missouri Attorney General Catherine Hanaway gave six platforms notice in September that they should stop offering the relevant contracts to state residents or comply with sports-wagering rules. The state argues that a contract paying out based on a sporting result is a bet in substance, whatever name a platform gives it.
North American Derivatives Exchange, behind Crypto.com’s prediction offering, filed in Missouri’s Western District. Novig operator Ludlow Exchange filed separately in the Eastern District. Both are asking the courts to restrict state enforcement while the dispute over jurisdiction plays out.
The conflict cuts to the business model of prediction exchanges. A federally supervised derivatives venue may argue that it should not need to obtain a separate state gambling licence for every jurisdiction in which a customer trades. States respond that sports wagering rules, including age restrictions and local taxes, cannot be bypassed simply through contract design.
Kalshi, Polymarket, Robinhood and Underdog also received Missouri letters, but had not filed comparable cases there as of the latest court review. Their choices should not be mistaken for acceptance of the state’s position.
For now, the litigation is an opening move. Neither filing establishes that Missouri’s restrictions are unlawful, and any interim court order would be narrower than a final judgment on how sports event markets can operate nationwide.
Written by the News Desk and edited by Samuel Rae.