Crypto.com’s prediction-market exchange and Novig have filed separate federal lawsuits to block Missouri Attorney General Catherine Hanaway from applying the state’s sports wagering laws to their sports event contracts, escalating a jurisdictional fight as cease-and-desist deadlines expired.
North American Derivatives Exchange, the Commodity Futures Trading Commission-registered exchange behind Crypto.com’s OG prediction markets platform, filed in the U.S. District Court for the Western District of Missouri. Novig’s exchange operator, Ludlow Exchange LLC, filed its own case in the U.S. District Court for the Eastern District of Missouri.
Both companies are seeking court orders that would prevent Missouri from enforcing its sports betting rules against their platforms. Their central argument is that federally regulated event-contract markets fall under the Commodity Exchange Act and the CFTC’s authority, rather than state gambling regulators.
Missouri demanded operators halt sports contracts or obtain licenses
Hanaway sent cease-and-desist letters to six event-contract platforms on Sept. 16 and 17: Crypto.com, Novig, Kalshi, Polymarket, Robinhood and Underdog. The letters gave the companies 30 days to stop offering sports-related contracts to Missouri residents or obtain a license from the Missouri Gaming Commission.
The attorney general’s office said the contracts function as sports wagers under Missouri law and should be subject to the state’s licensing rules and 10% wagering tax. Missouri voters approved legal sports wagering in November 2024, placing the Gaming Commission in charge of the state’s newly authorized betting market.
One of the letters also raised age restrictions. Missouri requires sports bettors to be at least 21, while the attorney general’s office said users as young as 18 could trade contracts on one of the targeted platforms.
The enforcement campaign places federally regulated prediction exchanges alongside sportsbooks in Missouri’s legal framework, despite meaningful differences in how the products are structured. A sportsbook sets odds and accepts wagers against the house, while event-contract exchanges typically match buyers and sellers of contracts that pay out according to a defined result, such as whether a team wins a game.
Crypto.com exchange cites federal commodities law
The Crypto.com-linked complaint argues that the Commodity Exchange Act gives the CFTC “exclusive jurisdiction” over the contracts offered through North American Derivatives Exchange. The exchange seeks a declaratory judgment that Missouri’s gambling laws cannot be applied to its products, as well as a permanent injunction against enforcement.
The lawsuit also points to an apparent mismatch in the state’s correspondence. Hanaway’s letter was addressed to Foris DAX Inc., a Crypto.com affiliate, rather than North American Derivatives Exchange, the CFTC-registered exchange that filed the lawsuit.
North American Derivatives Exchange further argues that Missouri’s proposed licensing route is effectively unavailable. Missouri’s constitution permits only two direct mobile sports wagering licenses, and both have already been awarded, according to the complaint. The argument could complicate Missouri’s position that an exchange can simply obtain a license if it wishes to continue offering sports-related contracts in the state.
The case does not challenge Missouri’s right to regulate conventional sports betting generally. Instead, it asks whether the state can regulate a federally supervised derivatives venue when that venue lists contracts tied to sporting outcomes.
Novig asks court to wait for 8th circuit ruling
Novig’s lawsuit takes a similar position but puts greater emphasis on pending appellate litigation. Ludlow Exchange asked the Eastern District of Missouri for preliminary and permanent injunctions, seeking to preserve its operations while the U.S. Court of Appeals for the 8th Circuit considers a related dispute involving Kalshi and Iowa regulators.
The 8th Circuit includes Missouri, so its eventual ruling could provide the most immediate appellate guidance for federal courts in the state. Novig argues that allowing enforcement to proceed before that decision could disrupt its business and customer access to contracts that it says are federally regulated.
The litigation reflects an unresolved split among federal appeals courts. The 3rd Circuit has ruled in Kalshi’s favor on the preemption question, finding that federal commodities law can displace state restrictions in the relevant circumstances. The 6th and 9th Circuits have reached outcomes unfavorable to Kalshi in separate disputes.
That division leaves operators facing different rules depending on where they offer contracts and where state officials choose to bring enforcement actions. A favorable ruling in one circuit does not automatically settle the issue elsewhere, giving state attorneys general room to continue testing their authority.
Other platforms have not yet sued in Missouri
Kalshi, Polymarket, Robinhood and Underdog received the same Missouri cease-and-desist letters but had not filed suits in either of Missouri’s federal districts as of Sunday, according to court records.
Kalshi was the first recipient to respond publicly to Missouri’s notices. Hanaway’s office has described its contacts with the company as “ongoing discussions,” indicating that negotiations and litigation may proceed in parallel.
Underdog recently sued Connecticut over a comparable attempt to restrict sports event contracts, but it has not brought a Missouri case. Its Connecticut challenge illustrates how the dispute is expanding state by state rather than through a single national proceeding.
Missouri’s lawsuits could become an early test of whether state sports-betting systems can capture tax revenue and impose age rules on prediction-market operators that claim federal oversight. For now, the result will depend heavily on how Missouri’s district courts read the Commodity Exchange Act and whether the 8th Circuit offers a clear answer in the Kalshi appeal.
Curious how prediction markets evolve after these lawsuits? Learn why 2026 could redefine prediction markets for traders.
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