Crypto.com and Novig sue Missouri over sports event contracts

Novig and Crypto.com's U.S. derivatives exchange filed separate federal lawsuits on Oct. 16 asking judges to stop Missouri from treating their sports event contracts as unlicensed gambling, Unchained reported.

Ludlow Exchange, which operates as Novig, filed a 42-page complaint in the Eastern District of Missouri against Attorney General Catherine Hanaway, Missouri Gaming Commission Executive Director Michael A. Leara and commission Chair Jan Zimmerman. North American Derivatives Exchange, which Crypto.com owns, sued in the Western District and named Hanaway and members of the gaming commission, according to Unchained.

The suits respond to cease-and-desist letters Hanaway's office sent in September to six prediction market operators: Robinhood, Underdog, Novig, Crypto.com, Kalshi and Polymarket. The letters told the companies to stop offering sports event contracts to Missouri residents unless they obtained a state gaming license, and Novig's letter gave the company until Oct. 17 to comply, according to its complaint. No enforcement action against either exchange had been announced as of Monday.

Licensed sportsbooks in Missouri pay a 10% tax on gross receipts and must keep out anyone under 21, Unchained reported. Crypto Briefing reported the state levies a 10% tax on adjusted gross revenue and that application fees can reach $500,000.

"Companies cannot repackage sports bets as 'event contracts' to evade Missouri law," Hanaway wrote on X on Sept. 18.

The exchanges argue the Commodity Exchange Act gives the Commodity Futures Trading Commission exclusive jurisdiction over swaps traded on a federally designated contract market, and that their event contracts are swaps. The CFTC granted Novig that designation in June, the filing says. Novig wants a declaration that Missouri's gambling laws are preempted as applied to its exchange, along with preliminary and permanent injunctions.

North American Derivatives Exchange makes the same core argument in its own 39-page complaint. A footnote in that filing says the attorney general's office "incorrectly addressed" its cease-and-desist letter to Foris DAX, Inc., which the letter called Crypto.com, rather than to North American Derivatives Exchange.

The dispute turns on whether the products are financial derivatives or wagers. Federal regulators treat event contracts traded on a designated contract market as swaps under the CFTC's jurisdiction, while Missouri classifies the same products as sports betting under state law. Courts have reached different conclusions on federal preemption in earlier cases over unlicensed sports betting, and the Eighth Circuit appeal in KalshiEX v. Bird could produce a ruling that covers Missouri.

Both complaints seek court orders that would keep Missouri from enforcing its gambling rules against the exchanges while the litigation proceeds. Unchained reported that no enforcement action against either exchange had been announced as of Monday, the day the suits became public.

The exchange says an early injunction would "hold the parties' legal positions in place pending resolution of a question on which courts have divided." It points to Kalshi's pending appeal in KalshiEX v. Bird at the Eighth Circuit, which covers Missouri, where briefing is set to wrap up on Dec. 6, Unchained reported.

Federal court records in Missouri showed no suits from Kalshi, Polymarket, Robinhood or Underdog as of Monday.

Missouri voters approved Amendment 2 on Nov. 5, 2024, legalizing sports wagering and putting the Missouri Gaming Commission in charge of oversight. The regulated market launched on Dec. 1, 2025, Crypto Briefing reported. Novig, operated by Ludlow Exchange LLC, launched its CFTC-regulated prediction market platform on Aug. 4, 2026 and focuses on sports.

Crypto Briefing reported the attorney general's office also raised age concerns about five of the six platforms, centered on a participation age of 18. Novig was the only operator not named in that part of the complaint.

Crypto Briefing reported that federal courts have previously rejected similar preemption claims in disputes over unlicensed sports betting. Hanaway's office announced the cease-and-desist orders on its website.