Crypto.com and Novig have taken Missouri to federal court, filing separate lawsuits on October 16 to block the state from enforcing its sports betting laws against their prediction markets after a 30-day compliance deadline expired.
By Maria Rodriguez | October 19, 2026
The clash is the newest and loudest battle in a fight that has been building all year between state gambling regulators and federally licensed prediction market exchanges. At stake is a simple question with billions in potential volume behind it: who gets to regulate sports event contracts in America — the states that license and tax sports betting, or the federal commodities watchdog in Washington?
The Hook: A 30-Day Deadline Expired, and the Suing Started
According to federal court records reviewed by The Block and crypto.news, Missouri Attorney General Catherine Hanaway sent cease-and-desist notices in September to six prediction market operators: Crypto.com, Novig, Kalshi, Polymarket, Robinhood and Underdog. The state gave them 30 days to either stop offering sports event contracts to Missouri residents or obtain state gambling licenses and follow Missouri rules.
That deadline has now run out — and two of the six, Crypto.com and Novig, responded by suing. As of Sunday, they were the only two operators reported to have filed federal cases in Missouri, according to The Block’s review of court dockets. The other four have so far held off, a split that tells you how differently each company reads its legal exposure.
What Missouri Wanted: Licenses, Taxes and an Age Limit
Missouri’s position is that sports event contracts are simply sports bets wearing a new suit. Under the state’s sports wagering framework, licensed operators must pay a 10 percent tax on gross sports betting receipts and block anyone under 21 from placing wagers. Hanaway’s letter to Crypto.com specifically alleged that its platform allowed users as young as 18 to trade sports event contracts — below Missouri’s legal gambling age.
- Six operators warned — Crypto.com, Novig, Kalshi, Polymarket, Robinhood and Underdog received cease-and-desist notices in September
- 30 days to comply — stop offering sports contracts to residents or get a state license
- 10 percent tax — the levy Missouri applies to gross sports betting receipts from licensed operators
- Age 21 minimum — the state alleged Crypto.com’s platform let 18-year-olds trade
The Core Conflict: Federal Law Versus State Gambling Rules
The lawsuits argue the opposite of everything Missouri claims. Crypto.com’s case was brought by North American Derivatives Exchange, the federally regulated derivatives exchange behind the company’s OG prediction markets platform, in the U.S. District Court for the Western District of Missouri. The complaint argues that the Commodity Exchange Act gives the Commodity Futures Trading Commission exclusive authority over these contracts — meaning Missouri cannot regulate them as conventional sports wagers.
The exchange is asking the court for a declaratory judgment confirming that reading of the law, plus a permanent injunction blocking state officials from taking enforcement action against its sports event contracts. It also raised a procedural jab: the complaint says Hanaway’s office addressed its cease-and-desist letter to Foris DAX, Inc., instead of North American Derivatives Exchange, the entity that actually operates the federally regulated market.
Crypto.com added one more practical argument: getting a Missouri license is not a realistic option. The state’s constitutional framework provides only two direct mobile sports wagering licenses, and both have already been awarded. Novig’s parallel suit makes the same core claim — that its contracts live under federal commodities law, not state gambling statutes.
Why the Courts Are Split — and Why the Eighth Circuit Matters
This is not just a Missouri fight. Federal appeals courts remain divided over whether state gambling laws apply to sports prediction markets at all, and a related Kalshi case is pending before the Eighth Circuit — the appeals court that covers Missouri. Whatever that panel decides could effectively settle the question for the entire region, which is one reason the other four operators may be waiting rather than suing. Why spend millions on litigation if a ruling in the Kalshi case might hand you the answer for free?
For context on how fast this market has grown: Crypto.com only launched its OG prediction market platform in February 2026, offering sports, financial and cultural event contracts through its federally regulated derivatives infrastructure. That a product barely eight months old is now at the center of a federal court fight shows how quickly prediction markets moved from niche curiosity to mainstream battleground.
What This Means for You
If you trade on prediction markets, the practical risks in the near term are access and uncertainty. A state win would mean platforms geofence Missouri (as several already do in other restrictive states) and other attorneys general copy the playbook. A platform win would cement the CFTC-only regulatory lane and likely accelerate the rollout of sports contracts across states that oppose them. Either way, watch the Eighth Circuit Kalshi ruling — it is the single decision most likely to move the needle.
The Verdict
This lawsuit is less about Missouri than about the constitutional pecking order of American crypto regulation. Prediction markets have become the sharpest edge of the federal-versus-state conflict, and the industry’s biggest names are now forced to pick sides — sue, wait, or quietly leave. The outcome will shape whether event contracts become a nationally uniform market under the CFTC or a state-by-state patchwork that looks a lot like traditional sports betting.
The cryptocurrency market remains highly volatile. This article is for informational purposes only and does not constitute financial advice.
Disclaimer: This article is for informational purposes only and does not constitute financial advice.
the 18 vs 21 age thing is the strongest card missouri has honestly. everything else is just the state wanting its 10 percent cut
disagree, the age angle is cover. if it were really about protecting 19 year olds they would not be demanding a 10 percent tax on receipts in the same letter
lol at hanaway sending letters to six exchanges and only two bothered to sue back. kalshi sitting quiet says a lot about who actually fears state court
@kansasdegen kalshi already won the jersey fight and banked the winnings, why would they fund another courtroom. the exchanges that actually got hit with the october deadline are the ones suing, checks out
@kansasdegen kalshi aint quiet, they are busy counting the new jersey winnings. why fund a second courtroom fight when missouri will probably fold at the injunction hearing anyway
Remember when everyone said prediction markets were federally untouchable after the CFTC signoffs. State AGs found the side door. This will end up at the Supreme Court mark my words
six cease and desist letters in one month and missouri thought all of them would just fold? kalshi already beat the states in court, this was predictable
The line that gets me is the 30 day deadline. Hanaway basically dared them to sue and they called it. States keep losing the preemption argument and keep trying anyway.
@Cass they lose because event contracts arent sports betting under CFTC rules, courts have said this like three times now. missouri is burning tax dollars on a settled question
three federal wins yes, but look at the panels those landed in front of. one reshuffled circuit and that streak means a lot less. courts are not a vending machine you keep feeding
The 10 percent tax demand buried in the same filing is doing more damage to Missouri’s protect-the-kids argument than anything the exchanges could write in a complaint.
@Dana wait until discovery pulls the emails about who picked the 10 percent number. these filings usually have a revenue model attached that never matches the child safety press release
Two companies filing separate lawsuits on the exact same October 16 date. Crypto.com and Novig clearly compared notes before pulling the trigger. Thats not litigation strategy, thats a coordinated message to every other state AG watching.