Novig, Crypto.com Sue Missouri Over Prediction Market Enforcement

Novig and Crypto.com have filed separate federal lawsuits against Missouri officials, seeking to prevent the enforcement of state sports wagering laws against their prediction markets. These filings occurred as 30-day deadlines expired following cease-and-desist letters issued by Missouri Attorney General Catherine Hanaway.

What Happened

Missouri Attorney General Catherine Hanaway, who had previously indicated that litigation was probable, is now facing federal lawsuits from Novig and Crypto.com. Both companies filed separate federal lawsuits last week, seeking judicial orders to prohibit Missouri officials from enforcing state sports wagering laws against their respective prediction markets in Missouri, according to SBC Americas. These lawsuits were initiated as the 30-day deadlines stipulated in Hanaway’s cease-and-desist letters concluded.

Novig, operating through its exchange entity Ludlow Exchange LLC, filed its complaint in the Eastern District of Missouri. Concurrently, the North American Derivatives Exchange, which supports Crypto.com’s prediction markets, filed its lawsuit in the Western District. Other prediction market operators previously targeted by Missouri, including Kalshi, Polymarket, Robinhood, and Underdog, have not yet initiated legal action.

Key Details

• Novig’s complaint names Attorney General Hanaway and Missouri Gaming Commission (MGC) officials Michael Lear and Jan Zimmerman, requesting a declaration that Missouri’s gambling laws are preempted regarding its exchange and seeking preliminary and permanent injunctions, as reported by SBC Americas.
• Novig argues its event contracts qualify as swaps under the Commodity Exchange Act, falling under the Commodity Futures Trading Commission’s (CFTC) exclusive jurisdiction. The company also referenced the CFTC’s October 9 proposal to classify event contracts linked to sports, politics, culture, and weather as swaps, according to SBC Americas.
• Novig contends that Missouri’s licensing framework is unsuitable for an exchange, citing requirements that would necessitate geofencing participants, paying a 10% state tax, and fragmenting the national liquidity crucial for matching buyers and sellers. The complaint states that a licensing system designed for a ‘house’ model does not accommodate a market without one.
• Crypto.com’s suit asserts the same jurisdictional argument and claims Hanaway incorrectly addressed her letter to Foris DAX, Inc., rather than the exchange. It also argues that obtaining a license is not feasible due to the state’s constitution allowing only two untethered mobile sports betting licenses, both of which are reportedly already allocated.
• Missouri Attorney General Hanaway initiated the cease-and-desist letters in September, maintaining that sports event contracts on Missouri prediction markets constitute unlicensed sports betting under the framework approved by voters in 2024, as detailed by SBC Americas.

Why It Matters

This legal challenge highlights an ongoing nationwide dispute concerning the regulatory classification of prediction markets, specifically whether event contracts tied to sports fall under state sports wagering laws or federal commodities regulations. The outcome of these cases, particularly an upcoming ruling from the Eighth Circuit Court of Appeals concerning Kalshi’s appeal in Iowa, could establish binding precedent for federal courts in Missouri and six other states, according to SBC Americas. The appeals courts currently exhibit a split on this issue, with differing rulings in New Jersey, Nevada, Ohio, and Tennessee. This jurisdictional ambiguity has prompted New Jersey, along with various industry stakeholders and states, to urge the U.S. Supreme Court to address the broader national jurisdiction dispute, a push that Missouri has now joined by signing an Ohio-led brief, as reported.

Originally reported by SBC Americas·Published 19 Oct 2026, 18:19