Novig and Crypto.com Sue Missouri as State’s Prediction Market Deadline Hits

Missouri gave prediction market operators a choice: stop offering sports contracts or get a state gambling license.

Novig and Crypto.com chose to sue.

The companies filed separate federal lawsuits last week, challenging Attorney General Catherine Hanaway’s attempt to apply Missouri’s sports wagering laws to their event contracts. Novig’s operator, Ludlow Exchange, filed in the Eastern District of Missouri. North American Derivatives Exchange, the exchange behind Crypto.com’s OG prediction market platform, sued in the Western District.

Both seek court orders blocking state enforcement, arguing that federal commodities law puts their contracts under the Commodity Futures Trading Commission’s exclusive jurisdiction. Missouri considers the products unlicensed sports wagers subject to its licensing, tax and consumer-protection rules.

The filings establish two new challenges, not permission to continue operating.

Missouri’s 30-day ultimatum draws two lawsuits

Hanaway’s office announced its crackdown on Sept. 18 after sending letters to six companies:

• Crypto.com

• Kalshi

• Novig

• Polymarket

• Robinhood

• Underdog

The letters demanded that operators stop offering sports event contracts in Missouri or obtain state authorization and pay the associated taxes and fees, with confirmation requested 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.”

Missouri is not trying to keep sports betting out altogether. Voters approved it in 2024, and the regulated market launched on December 1, 2025. The state taxes adjusted gross sports wagering revenue at 10%, while online licensing and five-year renewal fees can each reach $500,000.

That puts the dispute squarely over which regulatory system applies. Missouri wants the exchanges to operate under the framework that governs its sportsbooks. The exchanges argue that their federal status prevents the state from imposing that framework.

Novig argues an exchange is not a sportsbook

Novig’s complaint names Hanaway, Missouri Gaming Commission Executive Director Michael Lear and Commission Chair Jan Zimmerman in their official capacities. It seeks a declaration that Missouri’s gambling laws are preempted as applied to its contracts, along with preliminary and permanent injunctions.

The company says the CFTC designated Ludlow Exchange as a contract market on June 16. It argues that sports event contracts qualify as swaps under the Commodity Exchange Act, bringing them under the federal regulator’s exclusive jurisdiction. Those are the company’s legal claims, not the Missouri court's findings.

Novig also challenges how well its business model fits sportsbook regulation. The complaint argues that it matches buyers and sellers rather than taking the opposing position on every wager.

“A licensing regime calibrated to the economics of the house does not readily accommodate a market with no house,” the complaint says.

Without protection, Novig says it faces a choice between leaving Missouri and risking criminal liability, civil penalties and other enforcement remedies. Its filing also points to its responsible-trading rules and a minimum participation age of 21. Missouri raised underage-access concerns with five of the six letter recipients; Novig was the exception.

Crypto.com challenges the licensing alternative

Crypto.com’s lawsuit was filed by North American Derivatives Exchange, doing business as OG.com Prediction Markets, not by the entity to which Missouri addressed its cease-and-desist letter. The company reportedly argues that the letter was incorrectly directed to Foris DAX rather than the exchange operating the contracts.

The exchange also disputes whether obtaining a state license is a realistic alternative. According to reporting on its complaint, Missouri’s constitution allows only two direct mobile sports wagering licenses, both of which have already been awarded.

That argument does not resolve whether Missouri can regulate the contracts. It challenges the practicality of the state’s proposed route to compliance.

An Iowa appeal could shape both Missouri cases

The Missouri lawsuits add another front in the Eighth Circuit Court of Appeals, which has yet to resolve the central federal-preemption question. Novig is asking for preliminary protection while that appeals court considers Kalshi’s related challenge against Iowa officials. According to Novig’s complaint, briefing in KalshiEX LLC v. Bird is scheduled to conclude December 6.

That appeal matters because Missouri’s federal district courts fall within the same circuit. An appellate ruling could shape how judges handle the new lawsuits, even though the companies and state enforcement actions differ.

Elsewhere, the appellate map remains divided. The Third Circuit sided with Kalshi in New Jersey, while the Ninth Circuit ruled against it in Nevada. On Sept. 25, the Sixth Circuit also rejected Kalshi’s bid for protection in the Ohio and Tennessee disputes. Kalshi has requested rehearing in the Sixth Circuit.

The split leaves exchanges fighting for access state by state rather than operating under one settled national answer.

The Supreme Court fight is already underway

The Missouri cases are new, but the larger jurisdictional dispute is already before the U.S. Supreme Court in requests for review arising from other states.

New Jersey is asking the justices to review the Third Circuit’s pro-Kalshi ruling. Industry groups supporting that petition have also urged the court to take related Nevada petitions and settle whether federal commodities law displaces state sports betting regulation. The Supreme Court has not agreed to hear the cases, and Kalshi’s response in the New Jersey matter is due Nov. 9.

For Novig and Crypto.com, the immediate objective is narrower: secure protection from Missouri enforcement while those broader questions work through the courts.

As of Sunday, reporting identified only their two lawsuits among the six recipients of Missouri’s letters.

Missouri’s deadline has produced another pair of federal cases. Whether it produces an enforceable shutdown or court protection for the exchanges remains unresolved.