Two prediction market operators are asking federal judges to stop Missouri from treating their sports event contracts as unlicensed sports betting. Crypto.com and Novig each filed suit on October 16, 2026, after Attorney General Catherine Hanaway’s office told them to either stop serving Missouri residents or obtain state sports wagering licenses. The central dispute is whether these contracts are swaps under federal commodities law or sports bets under Missouri law.
Cease-and-desist letters sent to six firms
Hanaway’s office issued the orders on September 16 and 17, 2026. The six recipients were Kalshi, Polymarket, Crypto.com, Novig, Robinhood and Underdog. The attorney general’s office stated that companies cannot dress up sports bets as event contracts to get around Missouri law, according to Crowdfundinsider. Each letter set a 30-day deadline to stop offering the contracts in Missouri or get a license from the Missouri Gaming Commission and pay state taxes and fees. License and renewal fees could each reach $500,000, and the state collects a 10 percent tax on adjusted gross sports wagering revenue.
CFTC swaps versus state wagering law
Crypto.com and Novig argue that sports event contracts qualify as swaps under the Commodity Exchange Act and therefore fall under the exclusive jurisdiction of the Commodity Futures Trading Commission. Novig calls the contracts “quintessential swaps” and says a nationally run exchange cannot operate under scattered state licensing and tax rules. Missouri officials counter that the contracts are unlicensed sports wagering under state law, that federal law does not preempt gambling statutes, and that sports event contracts do not meet the swap definition. Appeals courts have disagreed on this question. Last month, the 6th Circuit ruled against Kalshi in combined cases from Ohio and Tennessee, while the 3rd Circuit sided with Kalshi in New Jersey, RG reported.
Missouri’s sports betting market is still young
Amendment 2 passed on November 5, 2024, giving the Missouri Gaming Commission authority over sports wagering; the legal market opened December 1, 2025. The legal wagering age is 21. Hanaway’s office raised underage-access concerns with five of the six platforms, noting that some user terms permitted participation at age 18. Novig was the only one not flagged for that issue. Missouri taxes adjusted gross sports wagering revenue at 10 percent, and the licensing structure includes fees up to $500,000, TheLines reported.
Lawsuits filed in separate judicial districts
Novig’s exchange operator, Ludlow Exchange LLC, filed in the Eastern District of Missouri as case number 4:26-cv-01780. Crypto.com’s CFTC-registered operating entity, North American Derivatives Exchange Inc., filed in the Western District as case number 4:26-cv-00969, assigned to U.S. District Judge David Gregory Kays. Kalshi, Polymarket, Robinhood and Underdog had not brought suits in either district by the following weekend, according to court record reviews. Novig, which launched a sports-only prediction market on August 4, 2026, Crypto Briefing reported.
What the two platforms are asking for
Novig asks the court to declare that Missouri’s gambling and sports-wagering provisions are preempted when applied to event contracts on its exchange, and it seeks preliminary and permanent injunctions. The company wants the district court to preserve the status quo while the 8th Circuit, which covers Missouri, weighs the same preemption question in Kalshi’s appeal from Iowa. Briefing in that appeal is set to close by December 6, 2026. Crypto.com likewise seeks a declaratory judgment and a permanent injunction. Its complaint says the state mailed the notice to the wrong entity—Foris DAX instead of the exchange—and adds that a state license is not realistically obtainable because Missouri’s constitution allows only two direct mobile sports-wagering licenses and both have already been awarded, according to The Block via RG.
What to watch next
The cases place the federal-state jurisdictional fight before Missouri federal judges. Early motions and any ruling on preliminary relief are the next signals. Hanaway’s office described ongoing talks with Kalshi as of October 2, according to a Spectrum News report cited by The Block. Underdog has challenged Connecticut over a similar order but has not filed in Missouri. The remaining platforms have not taken Missouri to court, though similar legal disputes are playing out in other states.
