Crypto.com and Novig have filed separate federal lawsuits against Missouri officials, challenging the state’s attempt to regulate sports prediction markets under gambling laws. Both companies argue that their sports event contracts fall under the exclusive jurisdiction of the Commodity Futures Trading Commission (CFTC), setting up another legal dispute over federal and state regulatory authority.
The lawsuits were filed on October 16, 2026, as a 30-day compliance deadline approached after Missouri Attorney General Catherine Hanaway issued cease-and-desist notices. According to The Block, six operators received the notices in September, including Kalshi, Polymarket, Robinhood and Underdog. The four other companies had not filed similar lawsuits in Missouri’s federal courts as of October 18.
North American Derivatives Exchange (Nadex), the CFTC-regulated exchange behind Crypto.com’s OG prediction market platform, filed its lawsuit in the U.S. District Court for the Western District of Missouri.
The complaint argues that the Commodity Exchange Act grants the CFTC exclusive jurisdiction over its event contracts, preventing Missouri from applying state gambling regulations to those products.
Nadex is seeking a declaratory judgment and a permanent injunction against state enforcement. It also argues that Missouri’s attorney general incorrectly addressed its cease-and-desist letter to Foris DAX, Inc., rather than the federally regulated exchange responsible for the contracts.
The complaint raises another obstacle to obtaining a state sports betting license. According to Nadex, Missouri’s constitutional framework permits only two direct mobile sports wagering licenses, both of which have already been awarded.
The company maintains that these circumstances make compliance through that licensing route unavailable, although this remains an argument presented in its lawsuit rather than an established court finding.
Novig filed its case through Ludlow Exchange LLC, its CFTC-designated contract market, in the U.S. District Court for the Eastern District of Missouri.
The lawsuit, Ludlow Exchange, LLC v. Hanaway et al., names Attorney General Hanaway and Missouri gaming officials Michael Lear and Jan Zimmerman as defendants.
Novig is seeking preliminary and permanent injunctions to prevent Missouri from enforcing its sports wagering laws against the company’s event contracts.
Its request for preliminary relief also references an ongoing appeal involving Kalshi in Iowa. Because Missouri and Iowa fall under the jurisdiction of the U.S. Court of Appeals for the Eighth Circuit, Novig argues that maintaining the existing conditions would be appropriate while the appeals court considers the federal preemption question.
Ludlow Exchange received its CFTC designated contract market status on June 16, 2026. Novig has also pursued legal challenges involving prediction market restrictions in Wisconsin, New York, Massachusetts, Washington and New Mexico.
Missouri’s enforcement action began with cease-and-desist letters dated September 16 and 17, followed by a public announcement from Hanaway’s office on September 18.
The letters instructed six prediction market operators to stop offering sports event contracts to Missouri residents or obtain authorization from the Missouri Gaming Commission. Companies were given 30 days to confirm compliance.
Hanaway’s office maintains that sports event contracts offered to Missouri residents constitute sports wagering and must comply with the state’s licensing and consumer protection requirements.
These include a minimum betting age of 21 and a 10% tax on adjusted gross sports wagering revenue.
The attorney general also raised concerns about age restrictions, alleging that five of the six operators allowed users younger than 21 to participate or lacked sufficient safeguards. Novig was not included in that allegation.
The letter sent to Crypto.com specifically questioned its minimum trading age of 18.
Missouri voters approved sports betting through Amendment 2 in November 2024, with the regulated market launching on December 1, 2025.
The Missouri lawsuits add to a growing number of disputes over whether federal commodities law prevents states from regulating sports event contracts as gambling.
Federal appeals courts have reached different conclusions in related cases involving Kalshi. The Third Circuit has sided with the company’s federal preemption argument, while the Sixth and Ninth Circuits have ruled against it.
The disagreement concerns whether sports event contracts traded on federally regulated exchanges fall exclusively under the CFTC’s authority or remain subject to state gambling restrictions.
These conflicting decisions create uncertainty for prediction market operators seeking to offer sports contracts nationwide.
The pending Kalshi appeal before the Eighth Circuit could provide additional guidance for courts in Missouri, although its outcome remains uncertain.
For now, Crypto.com and Novig are seeking judicial protection against Missouri’s enforcement measures. Neither lawsuit establishes that the companies are exempt from state gambling laws, and the courts have yet to resolve their claims.
Vladimir is a senior iGaming writer and editor, adept at breaking down the key details of crypto casinos and sportsbooks so players don’t have to, delivering honest, player-focused information that actually matters.
