Crypto.com and Novig take Missouri to federal court over sports contracts, as Kalshi, Polymarket and Robinhood hold back

Two prediction-market exchanges have sued Missouri officials to keep offering sports event contracts in the state. North American Derivatives Exchange, the CFTC-registered exchange behind Crypto.com's prediction markets, filed in the Western District of Missouri, and Novig's exchange operator, Ludlow Exchange, filed in the Eastern District, both on Friday, October 16, according to court records.

Attorney General Catherine Hanaway sent cease-and-desist letters in September to six companies, telling them to stop offering sports contracts to Missourians or get a license from the Missouri Gaming Commission and pay the state's 10% tax on sports betting. "Companies cannot repackage sports bets as 'event contracts' to avoid Missouri law," she said in the office's announcement.

Both exchanges argue that federal commodities law gives the CFTC exclusive authority over their contracts and overrides state gambling rules. Crypto.com's exchange seeks a declaratory judgment and a permanent injunction, The Block reported. Novig seeks a preliminary and permanent injunction and a declaratory judgment, and its complaint notes that the 8th Circuit, which covers Missouri, is already hearing a Kalshi appeal from Iowa on the same question; briefing there is set to end on December 6.

Kalshi, Polymarket, Robinhood and Underdog received the same letters but had not filed in either of Missouri's two federal districts as of Sunday, according to a review of court records by The Block. Federal appeals courts are already split: the 6th and 9th Circuits have ruled against Kalshi on the preemption question and the 3rd Circuit has sided with it, The Block noted.