Prediction market companies crypto.com and Novig filed lawsuits in Missouri to prevent local officials from blocking their sports event contracts.
Both lawsuits were filed on Friday, Oct. 16, roughly one month after Atty. Gen. Catherine Hanaway sent cease-and-desist orders to six prediction market operators, all of which were told their sports markets needed to be brought under state regulation or shut down.
Missouri enters prediction market battle
Crypto.com, Novig, Kalshi, Polymarket, Robinhood and Underdog were informed that they needed to procure state-approved gambling licenses to continue offering sports event contracts.
The cease-and-desists are especially impactful to a platform like Novig, which does not have markets in politics, finance, tech, weather, crypto, or any other industry. All of its prediction markets are tied directly to sports and have been since the platform launched in August.
As of Monday morning, Crypto.com and Novig are the only operators that have taken any form of action against Missouri officials, according to court records.
Novig filed its lawsuit under its exchange operator, Ludlow Exchange LCC, in the U.S. District Court for the Eastern District of Missouri. Crypto.com’s exchange, North American Derivatives Exchange Inc., submitted its suit in the Western District.
The four other platforms have previously filed lawsuits in states that attempted to block their sports prediction markets.
Regulatory disputes
Hanaway’s office wrote in letters issued on Sept. 16-17 that it deemed sports event contracts to represent an illegal sports betting product.
Companies were told that they could pay to go through the licensing process with the Missouri Gaming Commission and share taxes and fees on revenues, or they could close their prediction market offerings. The letters noted that initial licensing and five-year renewals could cost $500,000 each.
Operators were asked to confirm they received the letter within 30 days.
“Companies cannot repackage sports bets as ‘event contracts’ to avoid Missouri law,” Hanaway said in the announcement. “We will enforce the rules voters approved and protect consumers.”
In addition to claims that prediction markets violated state laws, the AG’s office said that each platform illegally offered wagering to customers under 21. Exchanges only require users to be 18 or older to create accounts and begin trading.
Thoughts and responses
Novig’s 42-page lawsuit refutes claims the prediction market contracts violate Missouri law, since the Commodity Futures Trading Commission was granted “exclusive jurisdiction” over swaps trading. “Swaps” are contracts or transactions that are traded between parties on an exchange without connecting direct ownership of an asset.
The lawsuit also highlights the operational differences between sportsbooks and prediction markets. Sportsbooks use house-made odds and oppose every wager made by users, while prediction companies use real-time market data in a peer-to-peer format.
Novig, backed by actress Sydeney Sweeney, is hoping to produce a preliminary injunction until the 8th Circuit, which includes Missouri, finishes reviewing a similar case involving Kalshi stemming from Iowa. That case’s briefing is scheduled to conclude on Dec. 6.
Crypto.com’s complaint was not publicly available at the time of writing.
Missouri launched sports betting on Dec. 1, 2025, around the time that prediction markets gained national prominence.
Underdog had received approval to launch a sports betting platform when the Missouri market went live last winter, but decided to forego its license to pursue prediction market contracts.
The Trade Handle Prediction Markets Take
States sending cease-and-desist letters and receiving retaliatory lawsuits has become commonplace in the modern national landscape as debates over prediction market regulation rage on. Larger ongoing cases in federal court, which have drawn appeals to the U.S. Supreme Court should provide a broader precedent once they are settled. For the time being, Missouri finds itself at odds with six prediction market companies that have previously demonstrated an unwillingness to acquiesce to state regulations.