Crypto.com and Novig sue Missouri to block sports prediction market crackdown

Crypto.com’s prediction market exchange and Novig have filed separate federal lawsuits against Missouri officials, seeking to stop the state from enforcing sports betting laws against their event contracts after a 30-day compliance deadline expired.

According to federal court records reviewed by crypto media, both companies filed their complaints on Oct. 16, challenging cease-and-desist notices issued by Missouri Attorney General Catherine Hanaway in September.

The lawsuits followed warnings sent to six prediction market operators, including Kalshi, Polymarket, Robinhood and Underdog, which were told to stop offering sports event contracts in Missouri unless they obtained state gambling licenses.

Crypto.com and Novig are the only two companies among the six reported to have filed federal lawsuits in Missouri as of Sunday. The other four had not brought cases in either of the state’s federal judicial districts, according to The Block’s review of court records.

Both plaintiffs argue that their contracts fall under federal commodities law and that Missouri cannot regulate them as conventional sports wagers.

Crypto.com challenges Missouri’s authority over sports contracts

North American Derivatives Exchange, the federally regulated derivatives exchange behind Crypto.com’s OG prediction markets platform, brought its case in the U.S. District Court for the Western District of Missouri.

The complaint argues that the Commodity Exchange Act gives the Commodity Futures Trading Commission exclusive authority over the disputed contracts, preventing Missouri from applying its gambling regulations to those transactions.

The exchange is seeking a declaratory judgment confirming its legal position and a permanent injunction preventing state officials from taking enforcement action against its sports event contracts.

Its filing raises a separate procedural objection concerning the recipient of Missouri’s enforcement notice.

According to the complaint, Hanaway’s office incorrectly addressed the cease-and-desist letter to Foris DAX, Inc., instead of North American Derivatives Exchange, the entity responsible for operating the federally regulated market.

The company further argues that obtaining a Missouri sports betting license is not a practical alternative because the state’s constitutional framework provides only two direct mobile sports wagering licenses, both of which have already been awarded.

Missouri’s attorney general had given the affected companies 30 days to comply with state licensing requirements or stop offering the disputed contracts to residents.

Under the state’s sports wagering framework, licensed operators must pay a 10% tax on gross sports betting receipts and prevent customers younger than 21 from placing wagers.

Hanaway’s letter to Crypto.com specifically alleged that its platform permitted users as young as 18 to trade sports event contracts, below Missouri’s legal gambling age.

Crypto.com launched its OG prediction market platform in February 2026, offering access to sports, financial and cultural event contracts through its federally regulated derivatives infrastructure.

The platform was introduced as a separate consumer-facing product with trading features, social engagement and leaderboards. Its initial launch focused on the United States.

Novig seeks injunction as Missouri lawsuit moves forward

Novig filed its lawsuit in the Eastern District of Missouri through Ludlow Exchange LLC, the CFTC-regulated entity operating its prediction market.

Federal court records identify the case as Ludlow Exchange, LLC v. Hanaway et al., numbered 4:26-cv-01780, with the complaint filed on Oct. 16.

The defendants include Attorney General Hanaway and Missouri gaming officials Michael Lear and Jan Zimmerman.

Novig has requested preliminary and permanent injunctions against enforcement of Missouri’s gambling laws as they apply to its sports event contracts.

The company argues that federal commodities regulation takes precedence over state gambling requirements for contracts traded on a CFTC-designated exchange.

Its request for preliminary relief refers to a pending appeal involving Kalshi in Iowa, which falls within the jurisdiction of the U.S. Court of Appeals for the Eighth Circuit.

Novig wants the Missouri court to preserve existing conditions while the appeals court considers the federal jurisdiction question.

The company has pursued similar legal challenges in other states.

In August, crypto.news covered Novig’s Wisconsin lawsuit, where the company sought to prevent state officials from applying gambling restrictions to its federally regulated sports contracts.

Ludlow Exchange received its CFTC designated contract market status on June 16, according to the earlier reporting.

The Wisconsin complaint followed legal challenges against officials in New York, Massachusetts, Washington and New Mexico, making Missouri another jurisdiction where Novig has sought protection from state enforcement.

Novig has continued developing commercial partnerships while pursuing those cases. In July, the company announced a multiyear agreement with the New York Mets to become the baseball team’s official prediction market partner.

Missouri says prediction markets must follow gambling laws

Missouri’s enforcement campaign began with cease-and-desist letters dated Sept. 16 and 17, followed by a public announcement from Hanaway’s office on Sept. 18.

In the official announcement, the attorney general argued that sports event contracts offered to Missouri residents constituted unlicensed sports wagering under state law.

“Companies cannot repackage sports bets as ‘event contracts’ to avoid Missouri law,” Hanaway said.

Her office maintained that companies offering these products must obtain licenses from the Missouri Gaming Commission, meet applicable tax obligations and enforce the state’s minimum betting age.

Missouri voters approved Amendment 2 in November 2024, creating the state’s regulated sports wagering framework.

Legal sports betting began on Dec. 1, 2025, with the Missouri Gaming Commission responsible for overseeing licensed operators.

The attorney general’s office alleged that five of the six targeted operators either allowed customers younger than 21 to access their products or lacked adequate safeguards to prevent underage participation.

Novig was not included in that specific age-related allegation in the state’s public announcement.

Hanaway warned that companies failing to comply with the cease-and-desist demands could face enforcement action.

Kalshi had entered discussions with the attorney general’s office before the deadline. Missouri officials described those talks as ongoing in comments reported by Spectrum News on Oct. 2.

Federal courts remain divided over prediction market regulation

Federal courts have reached different conclusions on whether the Commodity Exchange Act prevents states from regulating sports event contracts as gambling products.

The Sixth and Ninth Circuit Courts of Appeals have ruled against Kalshi’s position in related disputes, while the Third Circuit has sided with the company.

The Eighth Circuit, which covers Missouri, is considering the issue through the separate Iowa litigation cited by Novig.

A federal court in Wisconsin previously rejected the CFTC’s request for a preliminary injunction against state gambling enforcement in July.

Judge William Griesbach found that the regulator had not established the requirements for preliminary relief, including a likelihood of success on its federal preemption argument.

The decision did not constitute a final ruling on whether federal commodities law overrides Wisconsin’s gambling statutes.

Underdog has pursued its own legal challenges outside Missouri, including a lawsuit against Connecticut officials over restrictions on sports prediction contracts.

Novig’s Wisconsin case, filed on Aug. 14, names Attorney General Josh Kaul and gaming administrator John Dillett as defendants. Federal court records show that a preliminary pretrial conference was scheduled for Oct. 20.

In Missouri, the Eastern District docket confirms that Novig filed its complaint on Oct. 16 and submitted accompanying appearance and disclosure documents. The publicly accessible docket reviewed for this report does not establish that the court has granted its requested injunction.