Crypto.com's prediction market exchange and Novig sued Missouri officials in federal court as cease-and-desist deadlines ran out. Four other companies that got the same letters, including Kalshi and Polymarket, have not filed suit.
Crypto.com's prediction market exchange and Novig sued Missouri officials in federal court on Friday, asking judges to bar the state from enforcing its sports wagering laws against their event contracts. The suits landed as deadlines set by Attorney General Catherine Hanaway ran out.
Four companies have not sued
Kalshi, Polymarket, Robinhood and Underdog received the same letters in September. None had filed suit in Missouri's Eastern or Western federal districts as of Sunday, according to a review of court records by The Block.
Hanaway sent the letters on Sept. 16 and 17, giving each operator 30 days to stop offering sports event contracts to Missourians or get a license from the Missouri Gaming Commission and pay the state's 10% wagering tax. Hanaway said on X: "Companies cannot repackage sports bets as 'event contracts' to evade Missouri law."
Crypto.com argues federal law takes precedence
North American Derivatives Exchange, the CFTC-registered exchange behind Crypto.com's prediction markets platform, filed in the Western District of Missouri. Its suit argues that the Commodity Exchange Act gives the CFTC sole authority over its contracts and preempts state gambling law.
The complaint also says Hanaway incorrectly addressed her letter to Foris DAX, Inc. instead of the exchange. It adds that a sports betting license is not an option, since Missouri's constitution allows only two direct mobile sports wagering licenses and both have been awarded.
Novig points to a pending appeal
Novig filed in the Eastern District through its exchange operator, Ludlow Exchange LLC, and asks for a preliminary and permanent injunction. It argues the court should preserve the status quo while the 8th Circuit, which covers Missouri, hears an appeal on the same question in a Kalshi case from Iowa.
Other 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.
Source: The Block
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