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Missouri has become the latest state to crack down on sports prediction markets, joining a nationwide legal battle over whether “event contracts” fall under federal financial regulation or state gambling law.
Attorney General Catherine Hanaway announced Sept. 18 that her office had sent cease-and-desist letters to six operators:
- Crypto.com
- Kalshi
- Novig
- Polymarket
- Robinhood
- Underdog
The letters order the companies to stop offering sports event contracts to Missouri residents unless they obtain licenses from the Missouri Gaming Commission.
State officials argue the contracts amount to unlicensed sports wagering under Missouri law, and that labeling the products “event contracts” doesn’t exempt them from state gambling rules. The attorney general’s office also said several of the operators lack adequate age verification, potentially allowing Missourians under 21 to place sports wagers.
Missouri ties crackdown to 2024 betting law
Hanaway framed the enforcement action around the sports betting system Missouri voters approved through a 2024 ballot measure. The state launched legal mobile sports betting Dec. 1, 2025, under a regulated market overseen by the Missouri Gaming Commission.
In a statement from her office, Hanaway said any company offering sports wagering in Missouri must be licensed, pay a 10% tax on adjusted gross revenue and fees, and verify that bettors are at least 21.
The attorney general’s release also cited recent federal appeals court rulings finding that sports event contracts don’t qualify as swaps under the Commodity Exchange Act, which Missouri says bolsters its case that state gambling law can still apply.
Missouri AG expects prediction markets to sue
Hanaway has acknowledged the dispute will likely end up in court. She told KFVS 12 she hopes operators will bring their sports products under Missouri’s licensing and tax framework, though she recognizes some companies may sue instead, as prediction market operators have done elsewhere. “Chances are they may sue us once they get this cease-and-desist letter,” she told the station.
Kalshi and other operators maintain that event contracts traded on exchanges regulated by the Commodity Futures Trading Commission fall under exclusive federal oversight, leaving states without authority to treat them as gambling.
Missouri, like several other states, rejects that reading, arguing the contracts function as sports bets regardless of how they’re labeled.
Split rulings raise stakes for Supreme Court review
Missouri did not join the 44-state coalition, led by Ohio Attorney General Andy Wilson, that asked the CFTC in July to reject sports prediction markets. Even so, its cease-and-desist letters show more states are pursuing their own enforcement strategies outside that effort.
The legal landscape has shifted further in regulators’ favor in recent weeks. In late August, the Ninth Circuit Court of Appeals ruled that Kalshi’s sports event contracts are likely not swaps under the Commodity Exchange Act, clearing the way for Nevada to continue enforcing its gaming laws against the company.
Days before Missouri’s announcement, the same court ruled that California tribes are likely to succeed in arguing the contracts qualify as Class III gaming when offered on tribal land, holding that federal oversight of designated contract markets doesn’t override the Indian Gaming Regulatory Act.
Those rulings contrast with an April decision from the Third Circuit, which found the Commodity Exchange Act likely preempts New Jersey’s attempt to regulate Kalshi’s sports markets. New Jersey has since petitioned the US Supreme Court to review that ruling, and Robinhood and Crypto.com have separately asked the Court to weigh in on related questions.
With appellate courts now split, and more states like Missouri asserting their own gambling laws, the fight over who regulates sports prediction markets appears increasingly likely to land before the Supreme Court.
