At a glance

  • Crypto.com’s US derivatives exchange and prediction market Novig filed separate federal lawsuits on Friday, 16 Oct, asking judges to block Missouri from applying its gambling rules to the sports contracts they list.
  • The same September cease-and-desist letters went to Kalshi, Polymarket, Robinhood and Underdog. None of the four had sued in either of Missouri’s federal districts, according to court records reviewed by The Block and Unchained.

North American Derivatives Exchange, the Crypto.com-owned exchange registered with the Commodity Futures Trading Commission (CFTC), sued Attorney General Catherine Hanaway and members of the Missouri Gaming Commission in the Western District of Missouri, the court docket shows. The case, No. 4:26-cv-00969, is assigned to Judge Greg Kays.

Novig’s case is in the Eastern District, brought by Ludlow Exchange LLC, the entity that runs its exchange, The Block reported. Its 42-page complaint asks for preliminary and permanent injunctions, according to Unchained.

What the state wants

Hanaway’s office sent its letters on 16 and 17 Sep. The six operators had 30 days to either stop serving Missouri customers with sports contracts or get licensed by the gaming commission. State-licensed sportsbooks owe a 10% levy on gross receipts and may not take customers younger than 21, The Block reported.

“Companies cannot repackage sports bets as ‘event contracts’ to evade Missouri law,” Hanaway wrote on X in September. As of Monday the state had not announced action against either exchange, Unchained reported.

What the exchanges argue

Both complaints rely on preemption: when federal law covers a field, a state cannot apply its own rules to it. Under the Commodity Exchange Act, the companies argue, only the CFTC may oversee contracts listed on federally designated exchanges, so Missouri cannot treat them as gambling. Novig’s complaint says the CFTC designated its exchange in June, Unchained reported.

The Crypto.com exchange’s complaint says the attorney general’s letter went to Foris DAX, Inc. instead of the exchange, calling it “incorrectly addressed”, according to The Block. It adds that a Missouri licence is not available in practice: the state constitution caps direct mobile betting licences at two, and both are taken.

Federal appeals courts are split on the question. The 6th and 9th Circuits ruled against Kalshi, and the 3rd Circuit sided with it, The Block noted. Federal rulemaking may change the picture too: CryptoWatchDesk covered the CFTC’s proposal to write event contracts into the swap definition on 10 Oct.

None of the parties responded to The Block’s requests for comment.

What happens next

Missouri sits in the 8th Circuit, which is hearing Kalshi’s appeal in KalshiEX v. Bird, a case from Iowa. Novig’s complaint cites it as the reason to freeze the status quo, and briefing there is due to finish on 6 Dec, Unchained reported.

The next step in Missouri is the state’s response to the two complaints. For an earlier fight over the same contracts, see the NFL’s amicus brief against Kalshi.

Related: Utah sues Kalshi and two Susquehanna firms

This article is for information only and is not investment advice.