Crypto.com and Novig sue Missouri over sports event contracts

Crypto.com and Novig have taken Missouri officials to federal court in an effort to block enforcement of the state's sports betting laws against their sports event contracts. The suits arrived on Friday, the same day that 30-day deadlines ran out for six prediction market operators told by Missouri Attorney General Catherine Hanaway to halt sports event contracts or secure state authorisation.

The Crypto.com exchange arm, North American Derivatives Exchange, brought its action in the Western District of Missouri, contending that the Commodity Exchange Act grants the Commodity Futures Trading Commission sole authority over its contracts. Ludlow Exchange LLC, which operates Novig, lodged its case in the Eastern District of Missouri and is pursuing preliminary and permanent injunctions while the Eighth Circuit Court of Appeals weighs a related dispute involving prediction market platform Kalshi in Iowa.

In September, cease-and-desist letters went out to Crypto.com and Novig as well as to Kalshi, Polymarket, Underdog and Robinhood. Recipients were given 30 days to cease offering sports events contracts in Missouri or to seek a licence from the Missouri Gaming Commission. The Attorney General further noted that Crypto.com permits users aged 18 to trade contracts, whereas Missouri requires bettors to be at least 21 for legal sports betting.

So far, no other company has brought a case in either federal court district, though reports indicate Kalshi has held talks with the Attorney General's office. The suits form part of a broader debate over whether prediction market operators fall under state or federal oversight. Federal appeals courts have split on the question: the Sixth and Ninth Circuits decided against Kalshi in related cases, whereas the Third Circuit backed the prediction market operator.