Novig and Crypto.com have filed separate federal lawsuits against Missouri, challenging state demands that they stop offering sports event contracts or obtain authorization to operate under Missouri gambling laws. The legal actions followed cease-and-desist letters issued by Attorney General Catherine Hanaway in September, which gave six prediction market operators 30 days to comply.
Both companies are asking federal courts to prevent Missouri officials from enforcing state sports wagering restrictions against their products. Their complaints rely on federal law governing derivatives markets and argue that the Commodity Futures Trading Commission (CFTC) has exclusive jurisdiction over the contracts.
The lawsuits, filed on Friday, October 16, place Missouri among a growing number of states facing legal challenges from prediction market operators over the boundary between federally regulated financial contracts and state-regulated sports betting.
Separate Lawsuits Target Missouri Enforcement
Novig filed its complaint in the Eastern District of Missouri through its exchange operator, Ludlow Exchange LLC. The company is seeking preliminary and permanent injunctions against state officials, including members of the Missouri Gaming Commission.
Its complaint argues that Missouri is attempting to apply gambling and sports wagering laws to transactions that fall under federal jurisdiction. Novig characterizes its products as swaps governed by the Commodity Exchange Act, placing them within the CFTC’s regulatory authority.
The company has also asked the court to preserve the existing situation while the Eighth Circuit Court of Appeals considers a related dispute involving Kalshi and Iowa. The appeals court covers Missouri but has yet to issue a ruling on the broader question of whether federal regulation preempts state gambling laws for sports event contracts.
Crypto.com’s case was filed in the Western District of Missouri by North American Derivatives Exchange, the CFTC-registered exchange behind the platform’s OG prediction markets product. The complaint seeks a declaratory judgment and a permanent injunction against state enforcement.
The exchange argues that the Commodity Exchange Act gives the CFTC “exclusive jurisdiction” over its contracts and prevents Missouri from applying its gambling laws to those transactions.
According to Covers, Crypto.com’s complaint also challenges the way Hanaway addressed her cease-and-desist letter, stating that she “incorrectly addressed” it to Foris DAX, Inc. rather than the exchange itself.
The filing raises a further obstacle to the state’s proposed licensing route. According to the complaint, Missouri’s constitution permits only two direct mobile sports wagering licenses, and both have already been awarded. That restriction, the company argues, means obtaining a conventional sports betting license is not a viable option for its business.
Missouri Cites Licensing Rules and Consumer Protections
Hanaway’s office announced on September 18 that it had sent cease-and-desist letters to six prediction market operators: Novig, Crypto.com, Kalshi, Polymarket, Robinhood and Underdog. The letters were sent on September 16 and 17, giving the companies 30 days to stop offering sports event contracts to Missouri residents or seek authorization from the Missouri Gaming Commission.
The commission has overseen legal sports wagering in the state since voters approved Amendment 2 in November 2024. Licensed sports betting began on December 1, 2025, with operators subject to a 10% tax on gross receipts and a minimum betting age of 21.
Missouri’s attorney general has argued that prediction market platforms offering contracts tied to sporting events are effectively conducting unlicensed sports wagering. The office also contends that the contracts do not qualify as swaps under federal law and rejects the companies’ argument that federal regulation displaces state authority.
In a statement published on X, Hanaway said: “Companies cannot repackage sports bets as ‘event contracts’ to evade Missouri law,” Hanaway said on X.
The attorney general’s office also raised concerns about age restrictions and safeguards against underage participation. Its letters reportedly alleged that five of the six companies either permitted underage users or lacked adequate protections. Crypto.com’s letter specifically questioned the platform’s minimum trading age, stating that users as young as 18 could trade despite Missouri’s requirement that sports bettors be at least 21.
The state warned that operators would face enforcement action if they failed to comply with the letters. Novig and Crypto.com have instead chosen to contest Missouri’s authority in federal court.
Legal Disputes Spread Across the United States
The Missouri lawsuits form part of a wider dispute involving prediction market companies and state regulators. An online litigation tracker maintained by Mick Bransfield counted operators as plaintiffs in federal cases against 18 states as of October 15.
Novig had already brought cases against New York, Massachusetts, Washington, New Mexico and Wisconsin. Crypto.com had sued Nevada, Maryland, Connecticut and Washington. Kalshi’s litigation covered 14 states, according to the tracker.
Federal appeals courts have reached different conclusions about whether federal derivatives law prevents states from regulating sports event contracts under their gambling statutes. The Sixth and Ninth Circuits have ruled against Kalshi, while the Third Circuit has sided with prediction market operators. The developing split could become significant if the Missouri cases progress to the appeals stage.
The Eighth Circuit is also considering a related Kalshi dispute originating in Iowa, which Novig has cited in support of its request for preliminary relief. A decision there could influence the legal arguments in Missouri, although the outcome remains uncertain.
Missouri’s other targeted operators had not followed Novig and Crypto.com into federal court in the state. So far there are no Missouri lawsuits from Kalshi, Polymarket, Robinhood or Underdog.
Kalshi was the first of the six operators to respond to Hanaway’s letters. The attorney general’s office described “ongoing discussions” with the company, Spectrum News reported on October 2. Underdog, meanwhile, sued Connecticut over a similar regulatory crackdown last month but had not filed a Missouri case for now.
Enforcement activity has also increased elsewhere. Ohio sent 10 cease-and-desist letters on October 2, while Tennessee issued letters to five operators on October 9. Underdog filed a lawsuit against Tennessee on October 13. The outcome of the Missouri cases could help clarify how federal derivatives regulation applies to sports-related prediction markets, although the broader dispute remains unresolved.