Crypto.com, Novig sue Missouri over sports event contracts; Kalshi, Polymarket, Robinhood hold off

Crypto.com's prediction-market exchange and Novig filed separate federal lawsuits against Missouri officials on Friday, asking courts to block the state from enforcing its sports wagering law against their event contracts as 30-day cease-and-desist deadlines expired.

The actions follow letters sent by Missouri Attorney General Catherine Hanaway on Sept. 16 and 17 to six operators, giving each 30 days to stop offering sports event contracts to state residents or obtain a licence from the Missouri Gaming Commission and pay the state's 10% wagering tax. Voters legalised sports betting in Missouri in November 2024, and the state sets a minimum age of 21; Hanaway's letter to Crypto.com also noted the platform allows users as young as 18 to trade. "Companies cannot repackage sports bets as 'event contracts' to evade Missouri law," Hanaway said on X.

North American Derivatives Exchange (Nadex), the CFTC-registered exchange behind Crypto.com's OG prediction markets platform, filed in the Western District of Missouri. It argues that the Commodity Exchange Act grants the CFTC exclusive jurisdiction over its contracts and preempts state gambling law, and seeks a declaratory judgment and a permanent injunction. The complaint says Hanaway addressed the letter to Foris DAX, Inc. rather than the exchange, and contends that licensing is not a viable route because Missouri's constitution permits only two direct mobile sports wagering licences, both already awarded.

Novig, which has pursued similar cases in other states including Wisconsin, filed in the Eastern District through its exchange operator Ludlow Exchange LLC, seeking preliminary and permanent injunctions. The firm argues a preliminary injunction would preserve the status quo while the 8th Circuit, which covers Missouri, hears an appeal on the same preemption question in a Kalshi case originating in Iowa.

Other operators hold back

Kalshi, Polymarket, Robinhood and Underdog received the same letters but had not filed suit in either of Missouri's federal districts as of Sunday, according to a review of court records. Kalshi was the first to respond to Hanaway's letters, and the attorney general's office has described "ongoing discussions" with the company, Spectrum News reported on Oct. 2. Underdog sued Connecticut last month over a comparable crackdown but has not taken Missouri to court.

Federal appeals courts remain divided on whether federal law preempts state gambling statutes for sports event contracts, with the 6th and 9th Circuits ruling against Kalshi and the 3rd Circuit siding with it. Crypto.com, Novig and the Missouri attorney general's office did not immediately respond to requests for comment.