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Crypto.com and Novig take Missouri to federal court over sports event contracts as Kalshi and Polymarket hold off
Summary
Crypto.com’s CFTC-registered prediction-market exchange, North American Derivatives Exchange, and Novig sued Missouri officials in federal court on Friday, Oct. 16, asking judges to bar the state from enforcing its sports-wagering laws against their sports event contracts, The Block and Covers reported.
The suits follow cease-and-desist letters Missouri Attorney General Catherine Hanaway sent to six operators — Polymarket, Kalshi, Crypto.com, Novig, Underdog and Robinhood — demanding they stop offering sports event contracts to Missourians unless licensed by the Missouri Gaming Commission, according to the attorney general’s Sept. 18 release.
The Block said that, per its review of court records, Kalshi, Polymarket, Robinhood and Underdog had not sued in either of Missouri’s federal districts as of Sunday.
Both companies argue federal commodities law gives the CFTC exclusive jurisdiction and preempts state gambling law, while Hanaway’s office says sports event contracts are unlicensed sports wagering and do not qualify as swaps under the Commodity Exchange Act.
Accounts differ on details: The Block dated the letters Sept. 16 and 17, while the attorney general’s release announcing them is dated Sept. 18, and Covers described the letters as going to Novig, Crypto.com “and six other” operators, whereas the attorney general’s office lists six companies in total.
Key facts
- The Block reported North American Derivatives Exchange filed in the Western District of Missouri, arguing the Commodity Exchange Act gives the CFTC “exclusive jurisdiction” over its contracts, and seeks a declaratory judgment and a permanent injunction.
- According to The Block, the complaint says Hanaway “incorrectly addressed” her letter to Foris DAX, Inc. instead of the exchange, and that a sports-betting license is not an option because Missouri’s constitution allows only two direct mobile sports-wagering licenses and both have been awarded.
- The Block said Novig sued in Missouri’s Eastern District through its exchange operator, Ludlow Exchange LLC, seeking preliminary and permanent injunctions while the 8th Circuit hears an appeal on the same question in a Kalshi case from Iowa.
- Covers cited gaming lawyer Daniel Wallach as saying Crypto.com filed in the Western District rather than the Eastern District, where Novig sued, ensuring the two cases are not assigned to the same judge.
- The Missouri attorney general’s office quoted Hanaway: “Companies cannot repackage sports bets as ‘event contracts’ to avoid Missouri law,” adding that any sports-wagering company must be licensed by the Missouri Gaming Commission, pay required taxes and fees, and ensure no one under 21 can bet.
- The attorney general’s release said Missouri voters approved Amendment 2 in 2024, the regulated market launched Dec. 1, 2025, and sports-betting gross receipts are taxed at 10%; it warned that failure to comply will result in enforcement action.
- The Block said Hanaway’s letter to Crypto.com noted the platform lets users as young as 18 trade, while Missouri’s minimum sports-betting age is 21, and that the letters gave operators 30 days to comply.
- The Block noted federal appeals courts have split, with the 6th and 9th Circuits ruling against Kalshi and the 3rd Circuit siding with it, and cited Spectrum News’ Oct. 2 report that the attorney general’s office described “ongoing discussions” with Kalshi.
- Covers reported Novig launched its sports-focused prediction market in August and generated $125 million in trading volume in its first week.