Crypto.com and Novig sue Missouri over sports event contracts

Two prediction market firms sued Missouri on Friday to block the state from killing their sports event contracts. Crypto.com and Novig filed separate federal cases on October 16, 2026. Both say their contracts answer to federal regulators, not state gambling law.

Crypto.com sued through North American Derivatives Exchange, its federally registered platform, in the Western District of Missouri. Novig sued through its operator, Ludlow Exchange LLC, in the Eastern District. The Block, which reviewed court records, reported both filings and the docket number on the Crypto.com case, 4:2026cv00969. Each firm wants a court order stopping Missouri from enforcing its betting laws against them.

What the lawsuits argue

Both companies make the same core argument. Their sports event contracts are federally regulated derivatives, which puts them under the Commodity Futures Trading Commission and, they say, out of reach of state gambling law.

Novig's filing calls the products swaps under the Commodity Exchange Act, the federal statute that hands the CFTC exclusive jurisdiction over such trades. Crypto.com makes a parallel claim for its platform. The legal theory is not new. Prediction markets have leaned on it against several states this year.

The choice of courts was deliberate. Crypto.com filed in the Western District while Novig filed in the Eastern District. Daniel Wallach, a gaming law attorney, said Crypto.com picked a separate district so the two cases would not land before the same judge. One filing seeks a declaratory judgment and a permanent injunction. The other asks for a preliminary injunction to hold the line while a related appeal plays out.

Why Missouri acted

Missouri moved first. On September 18, 2026, Attorney General Catherine Hanaway announced cease-and-desist letters to six prediction market operators: Crypto.com, Novig, Kalshi, Polymarket, Robinhood and Underdog. Her office gave each company 30 days to stop offering sports event contracts to Missourians or to get a license from the Missouri Gaming Commission and pay the state's 10% wagering tax.

Hanaway framed the contracts as sports betting under another name. She said companies "cannot repackage sports bets as 'event contracts'" to get around state law. The letters also raised an age problem. Crypto.com lets users as young as 18 trade, while Missouri sets the minimum betting age at 21. The attorney general's office flagged that gap for five of the six firms.

Missouri voters approved legal sports betting in November 2024, and the regulated market opened on December 1, 2025. Novig launched its CFTC-regulated sports prediction market on August 4, 2026, which set it against the new state rules within weeks.

Crypto.com argues a license is not even an option. Missouri's constitution allows only two direct mobile sports wagering licenses, and both are already taken. The company also says Hanaway addressed its letter to the wrong corporate entity, Foris DAX, Inc., rather than the exchange named in the suit.

The companies that stayed out

Four of the six firms did not sue. Kalshi, Polymarket, Robinhood and Underdog had not filed in either Missouri federal district as of Sunday, according to The Block's review of court records. Kalshi was the first to respond to the state. Its talks with the attorney general's office are described as ongoing.

What the four will do next is unclear. None has said publicly whether it will fight the order or comply. A lawsuit is one route. A quiet settlement is another. Hanaway has said her office is open to a deal.

What to watch

This fight is part of a wider clash over where prediction markets sit in US law, and it runs alongside the CFTC's own move to write a federal rulebook for crypto trading venues. Federal appeals courts have split. The Third Circuit sided with Kalshi in one case, while the Sixth and Ninth Circuits ruled against it, according to The Block. The Supreme Court has not taken up the question. Novig has asked for its preliminary injunction partly to keep things frozen while the Eighth Circuit hears a related Kalshi appeal from Iowa.

For now, Missouri's deadline has passed and two companies have chosen the courtroom. A ruling on the preliminary injunction will show how one judge reads the preemption claim. The result in Missouri will not bind other states, but every operator that received a letter this year will be watching it.