Crypto(.)com's (@cryptocom) prediction market exchange and Novig (@Novig) have sued Missouri officials over sports event contracts. The Block reported that both companies went to federal cour
Crypto(.)com's (@cryptocom) prediction market exchange and Novig (@Novig) have sued Missouri officials over sports event contracts. The Block reported that both companies went to federal court on Friday, asking judges to bar the state from enforcing its sports wagering laws against their contracts as the state's cease-and-desist deadlines ran out.
Missouri Attorney General Catherine Hanaway's office sent cease-and-desist letters in September to six operators: Polymarket, Kalshi, Crypto(.)com, Novig, Underdog and Robinhood. The state's position is that facilitating such event contracts amounts to unlicensed sports wagering under Missouri law.
According to The Block, the letters were sent on Sept. 16 and 17. They gave each operator 30 days to stop offering sports event contracts to Missourians or obtain a license from the Missouri Gaming Commission and pay the state's 10% wagering tax. Missouri voters approved legal sports betting in November 2024, and the commission oversees the market.
Hanaway said in the announcement that companies cannot repackage sports bets as event contracts to avoid state law, as quoted by Covers.
The companies argue that federal law overrides Missouri's rules. TokenPost reported that both say the Commodity Exchange Act gives the Commodity Futures Trading Commission (CFTC) exclusive authority over their event contracts. Novig has also asked the court for a preliminary injunction to pause enforcement while the case proceeds. Reporting on the Crypto(.)com filing says the exchange behind its prediction markets seeks a declaratory judgment and a permanent injunction.
Crypto(.)com's exchange also makes two narrower points, according to The Block and TokenPost. It says the attorney general's letter was addressed to Foris DAX Inc. rather than the trading platform. It also says Missouri's constitution allows only two mobile sports betting licenses, both already issued, so none is available to apply for.
The Missouri attorney general's office rejects the federal argument. Public Gaming Research Institute reported that the office says federal law does not preempt state law in this area and that sports event contracts do not qualify as swaps.
The Block found no Missouri federal suits from Kalshi, Polymarket, Robinhood or Underdog, which received the same letters, based on a review of court records as of Sunday. TokenPost noted the case comes amid a split among federal appeals courts over whether federal law overrides state oversight of these products, so the outcome in Missouri could add to a contested legal picture for prediction markets.
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