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Crypto.com and Novig Sue Missouri Over Sports Event Contract Enforcement

BearishMedium impact
CROUSD$0.0559 −1.83%

Prediction market platforms Crypto.com and Novig have filed federal lawsuits against Missouri officials to stop the state from enforcing sports wagering laws against their event contracts. The legal action follows a 30-day cease-and-desist notice from Missouri Attorney General Catherine Hanaway, who instructed six companies—including Kalshi, Polymarket, Robinhood, and Underdog—to stop offering contracts to residents or acquire a state sports betting license and pay a 10% tax.

The operators argue that federal regulation takes precedence over state gambling enforcement. North American Derivatives Exchange, which handles Crypto.com's contracts, stated in its court filing that the Commodity Futures Trading Commission holds exclusive jurisdiction under the Commodity Exchange Act. The exchange added that state licensing is unviable because Missouri's constitution limits direct mobile wagering licenses to two, both of which are already taken. Novig's suit similarly seeks an injunction while federal appellate courts remain split on preemption.

While Crypto.com and Novig take state regulators to court, the four other targeted operators have not filed lawsuits in Missouri. Meanwhile, Cronos (CROUSD) dropped 3.46% to $0.05501 today. Investors and market participants will watch for upcoming court rulings on preliminary injunctions and broader federal appellate decisions regarding state jurisdiction over prediction markets.

Key points

  • Crypto.com and Novig filed federal lawsuits in Missouri to block state sports wagering enforcement against their event contracts.
  • Missouri's attorney general demanded platforms obtain state licenses and pay a 10% wagering tax or stop offering contracts.
  • Crypto.com argued the Commodity Futures Trading Commission has exclusive jurisdiction over its contracts under federal law.
  • Other targeted companies, including Kalshi, Polymarket, Robinhood, and Underdog, have not filed Missouri lawsuits as of Sunday.

Written by our AI from expert market sources across the web. It can contain mistakes: check the facts before acting on them. Write-ups powered by the free AI API at FreeTheAI.org

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Questions and answers

Why are Crypto.com and Novig suing Missouri state officials?

They are seeking to prevent the state from enforcing sports betting laws against their event contracts, arguing that federal law gives the CFTC exclusive jurisdiction over these financial instruments.

What requirements did Missouri set for prediction market platforms?

Missouri Attorney General Catherine Hanaway ordered platforms to stop offering sports event contracts to state residents or obtain a sports betting license, pay a 10% wagering tax, and enforce a minimum trading age of 21.

Which prediction market companies were issued cease-and-desist letters in Missouri?

Missouri sent letters to six operators: Crypto.com, Novig, Kalshi, Polymarket, Robinhood, and Underdog. As of Sunday, only Crypto.com and Novig have filed federal lawsuits against the state.