Two prediction-market operators sue Missouri over sports event contract rules

North American Derivatives Exchange, which operates Crypto.com's OG prediction-market platform, and Ludlow Exchange, the operator behind Novig, filed separate lawsuits on 16 October challenging Missouri's sports event contract rules. The filings followed the expiry of a 30-day compliance period set out in cease-and-desist notices. Both companies argue that federal commodities law gives the Commodity Futures Trading Commission authority over their contracts, putting them outside Missouri's gambling requirements.

Under Missouri's rules, bettors must be at least 21 years old, and licensed operators pay a 10% tax on gross sports-betting receipts. The state classifies sports event contracts sold to residents as sports wagering that needs state authorisation. The companies disagree, contending that their products trade through markets under federal regulation and fall under the Commodity Exchange Act, which in their view pre-empts state gambling requirements.

Cease-and-desist notices dated September 16 and 17 opened the enforcement campaign. On September 18, Attorney General Catherine Hanaway's office made the action public and gave six operators a 30-day window either to halt sports contracts in Missouri or to meet state requirements such as licensing, the 21-year minimum age and the 10% tax. According to Hanaway's office, calling a sports bet an event contract does not take it outside Missouri law. Five of the six companies were also accused of letting under-21 users reach their products or of lacking adequate safeguards against underage participation; that allegation did not name Novig.

The U.S. District Court for the Western District of Missouri is where North American Derivatives Exchange lodged its suit. The exchange wants a ruling that federal law controls the contested contracts, plus a permanent injunction barring state officials from applying gambling rules to it. Its complaint notes that the cease-and-desist letter from Hanaway's office went to Foris DAX, Inc. instead of to North American Derivatives Exchange, which runs the federally regulated market. The complaint adds that obtaining a state licence is unrealistic, since Missouri's constitution permits just two direct mobile sports-wagering licences and both have already been granted.

Ludlow Exchange brought the Novig suit as Ludlow Exchange, LLC v. Hanaway et al., case 4:26-cv-01780, in the U.S. District Court for the Eastern District of Missouri. Hanaway, together with Missouri gaming officials Michael Lear and Jan Zimmerman, is named as a defendant. The relief Ludlow Exchange seeks includes preliminary and permanent injunctions. In support of its preliminary request, it cites a separate Kalshi appeal pending before the U.S. Court of Appeals for the Eighth Circuit, which has jurisdiction over Missouri, and contends that enforcement ought to pause while the federal-versus-state jurisdiction question is resolved. As of the Eastern District docket examined for the report, Novig had not been shown to have secured the injunction it sought.

According to the report, Crypto.com's OG platform went live in February 2026 via the exchange's infrastructure under federal regulation, with contracts linked to sports, financial and cultural events, and Ludlow Exchange was granted CFTC-designated contract market status on June 16.

On the question of state authority over sports event contracts, federal appeals courts have not spoken with one voice. Kalshi lost before the Sixth and Ninth Circuits in related cases but prevailed in the Third Circuit. The jurisdiction issue is also before the Eighth Circuit in separate Iowa litigation involving Kalshi, which Novig invokes in its bid for preliminary relief. Earlier, a Wisconsin federal court refused the CFTC's request for a preliminary injunction against state enforcement, though that ruling left open whether federal commodities law ultimately prevails over Wisconsin gambling statutes. The report notes that Novig has additionally contested state action in Wisconsin, New York, Massachusetts, Washington and New Mexico.

As of the court-record review cited in the report, no lawsuits had been filed in either of Missouri's federal districts by the four remaining recipients of the state's notices: Kalshi, Polymarket, Robinhood and Underdog. In comments reported on October 2, Missouri officials said talks with Kalshi were continuing. What comes next will be the Missouri courts' rulings on the injunction requests and how the Eighth Circuit handles the Iowa appeal.