Missouri Attorney General Catherine Hanaway’s September cease-and-desist campaign against prediction-market platforms offering sports-related event contracts has produced its first federal lawsuits.
On October 16, 2026, two of the six recipients—Crypto.com’s affiliated exchange and sports-focused operator Novig—filed actions seeking to block the state from applying its sports-wagering laws to their products.
Kalshi, Polymarket, Robinhood, and Underdog, which received identical letters, had not filed comparable suits in either of Missouri’s federal districts by the following weekend.Hanaway’s office issued the letters on September 16 and 17.
They asserted that contracts allowing users to trade on the outcomes of sporting events amount to unlicensed sports wagering under Missouri law.
Recipients were given 30 days to stop serving Missouri residents or obtain a license from the Missouri Gaming Commission, pay the state’s 10 percent tax on wagering receipts, and satisfy other regulatory conditions, including age verification.
Missouri voters approved Amendment 2 in November 2024, authorizing regulated sports betting under the Gaming Commission; the licensed market opened December 1, 2025, with a minimum age of 21.
In the official announcement, Hanaway stated that companies “cannot repackage sports bets as ‘event contracts’ to avoid Missouri law” and that any firm offering sports wagering must be licensed, pay required taxes and fees, and ensure no one under 21 can participate.
The letters further contended that federal law does not preempt state gambling statutes in this area and that the contracts do not qualify as “swaps” under the Commodity Exchange Act.
Novig, through its CFTC-designated contract market Ludlow Exchange LLC, filed in the Eastern District of Missouri (Ludlow Exchange, LLC v. Hanaway, No. 4:26-cv-01780).
Its complaint seeks a declaration that Missouri’s gambling and sports-wagering provisions are preempted as applied to event contracts traded on its federally regulated exchange, plus preliminary and permanent injunctive relief.
The company argues that Congress placed such transactions within the exclusive jurisdiction of the Commodity Futures Trading Commission, that its sports event contracts are “quintessential swaps,” and that the state’s licensing and tax regime is structurally incompatible with a national exchange model.
It notes that an appeal raising the identical preemption question in a related Kalshi case from Iowa is already pending before the Eighth Circuit, which covers Missouri, and asks the district court to preserve the status quo while that appeal proceeds.
Compliance, Novig contends, would force it either to exclude Missouri participants or submit to a licensing framework designed for traditional sportsbooks, fragmenting the liquidity a designated contract market requires.
North American Derivatives Exchange, the CFTC-registered entity behind Crypto.com’s prediction-market platform, filed a parallel action the same day in the Western District of Missouri.
It likewise seeks declaratory and injunctive relief on preemption grounds, asserting exclusive CFTC jurisdiction under the Commodity Exchange Act.
The complaint reportedly states that the attorney general’s letter was addressed to the wrong corporate entity and that Missouri’s constitution authorizes only two direct mobile sports-wagering licenses, both of which have already been awarded, rendering licensure unavailable.
The two filings leave the remaining four recipients on the sidelines for the moment.
Missouri officials have framed the enforcement effort as necessary to uphold the voter-approved regulated market that funds public education and incorporates consumer protections.
The lawsuits now place the core jurisdictional conflict—whether federal commodities law displaces state gambling regulation of sports event contracts—before Missouri federal judges, against a backdrop of conflicting appellate decisions elsewhere in the country.
