Two prediction market platforms, Crypyo.com and Novig, have initiated legal action against the state of Missouri. They aim to block the enforcement of state sports betting laws on contracts related to sporting events negotiated through their platforms.
Lawsuits were filed last Friday after the 30-day deadline expired for six operators of prediction markets who were directed by Missouri Attorney General Catherine Hanaway to cease offering sports event contracts unless they obtain state approval.
Crypto.com, under the operation of the North American Derivatives Exchange, has brought its case to the Western District of Missouri, asserting that the Commodity Exchange Act grants exclusive jurisdiction over its contracts to the Commodity Futures Trading Commission (CFTC).
Meanwhile, Ludlow Exchange LLC, which operates Novig, is pursuing its own lawsuit in the Eastern District of Missouri. This case seeks both preliminary and permanent injunctions regarding its operations as the Eighth Circuit Court of Appeals addresses a comparable dispute involving another prediction market, Kalshi, located in Iowa.
In September, both Novig and Crypto.com, along with Kalshi, Polymarket, Underdog, and Robinhood, received letters demanding they discontinue their business activities. Currently, the other five firms have not filed lawsuits in either of the federal district courts, though discussions are ongoing between Kalshi and the Attorney General.
The Attorney General's office has highlighted that Crypto.com permits users under the age of 21 to trade contracts, which is against state law, as the legal trading age is 21. The correspondence also set a 30-day deadline for prediction market platforms to either halt their operations and sports event contracts in Missouri or seek a license from the Missouri Gaming Commission.
