Crypto.com and Novig sue Missouri over sports event contracts as four rivals stay out of court
Crypto.com and Novig take Missouri to federal court
Crypto.com's prediction market exchange and the platform Novig sued Missouri officials in federal court on Friday. Prediction markets are platforms where people trade contracts on the outcome of future events, including sports results.
The two companies want judges to stop the state from enforcing its sports wagering laws against their sports event contracts. The lawsuits came as deadlines set by Missouri Attorney General Catherine Hanaway ran out.
Four other companies that received the same cease-and-desist letters in September have not filed suit in Missouri's Eastern or Western federal districts, according to a review of court records by The Block. Those companies are Kalshi, Polymarket, Robinhood and Underdog.
Who sued, who did not, and where
- North American Derivatives Exchange, the CFTC-registered exchange behind Crypto.com's prediction markets platform, filed in the Western District of Missouri. The CFTC is the U.S. Commodity Futures Trading Commission, the federal regulator for futures and derivatives.
- Novig filed in Missouri's Eastern District through its exchange operator, Ludlow Exchange LLC.
- Kalshi, Polymarket, Robinhood and Underdog had not filed suit in either Missouri federal district as of Sunday, per court records. None of the four immediately responded to a request for comment from The Block.
What the September letters required
Hanaway sent the letters on Sept. 16 and 17. Each operator was given 30 days to stop offering sports event contracts to Missouri residents, or to get a license from the Missouri Gaming Commission and pay the state's 10% wagering tax.
The commission has overseen legal sports wagering in Missouri since voters approved it in November 2024. Hanaway's letter to Crypto.com also said the platform lets users as young as 18 trade, while Missouri's minimum age for sports betting is 21.
"Companies cannot repackage sports bets as 'event contracts' to evade Missouri law," Hanaway said on X.
The arguments in the two complaints
The Crypto.com exchange's lawsuit argues that the Commodity Exchange Act gives the CFTC "exclusive jurisdiction" over its contracts and preempts state gambling law. It seeks a declaratory judgment and a permanent injunction.
The complaint also says Hanaway "incorrectly addressed" her letter to Foris DAX, Inc. instead of the exchange. It further says a sports betting license is not an option because Missouri's constitution allows only two direct mobile sports wagering licenses, and both have already been awarded.
Novig's suit asks for a preliminary and permanent injunction. Novig argues the court should grant a preliminary injunction to preserve the status quo while the 8th Circuit, which covers Missouri, hears an appeal on the same question in a Kalshi case from Iowa.
Where the appeals courts stand
Federal appeals courts have split on whether federal law preempts state gambling laws for sports event contracts. The 6th and 9th Circuits ruled against Kalshi, while the 3rd Circuit sided with it.
How the other companies have responded
Kalshi was the first of the six companies to respond to Hanaway's letters. The attorney general's office described "ongoing discussions" with the company, according to Spectrum News on Oct. 2.
Underdog sued Connecticut last month over a similar crackdown, but it has not taken Missouri to court.
Crypto.com, Novig and the Missouri attorney general's office did not immediately respond to requests for comment.
What is confirmed
Court records and the filings confirm that Crypto.com's exchange operator and Novig filed federal lawsuits against Missouri officials on Friday, and confirm the courts and districts where each was filed. They also confirm that Kalshi, Polymarket, Robinhood and Underdog had not filed suit in either Missouri federal district as of Sunday.
The dates of the attorney general's letters, the 30-day deadline, the 10% tax, the licensing requirement, the 2024 vote on sports wagering, the age discrepancy raised in the Crypto.com letter, and Hanaway's public statement are all drawn from the source material.
What is still unclear
The four companies that have not sued did not immediately respond to a request for comment, so their plans are not known. It is also not yet clear how the courts will rule on the claims that federal law preempts Missouri's gambling rules, or how the 8th Circuit will decide the Iowa Kalshi appeal referenced by Novig.
Why it matters
The cases test whether sports event contracts sold on prediction markets are treated as federally regulated derivatives or as state-regulated sports betting. The outcome could affect whether these platforms can keep offering sports contracts to residents in Missouri and other states. The split among federal appeals courts means the question may not be settled until a higher court rules.
Sources
Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.