Cryptocurrency exchange Crypto.com and prediction market platform Novig have filed lawsuits against Missouri authorities, challenging the state’s regulatory authority over sports-related prediction market products.
On October 18, The Block reported that North American Derivatives Exchange (NADEX), which operates Crypto.com’s prediction market platform, and Novig separately filed suits in Missouri federal court October 16. Both companies contend that regulatory oversight for sports event contracts falls under the purview of the Commodity Futures Trading Commission (CFTC), arguing that state gambling laws should not apply in this case.
This legal action follows cease-and-desist letters sent by the Missouri Attorney General’s office September 16-17 companies: Crypto.com, Novig, Calshi, Polymarket, Robinhood, and Underdog. The letters demanded that these firms obtain state approval and pay a 10% sports betting tax to continue offering sports event contracts.
Missouri officials maintain that sports betting, even when labeled as event contracts, falls under state gambling regulations. They specifically raised concerns about Crypto.com allowing users as young as 18 to trade, while Missouri’s legal minimum age for sports betting is 21.
In its defense, Crypto.com argues that as a CFTC-registered exchange, federal commodities trading laws should supersede state gambling regulations. Similarly, Novig has requested to continue its operations pending a ruling, citing an ongoing appellate case involving Calshi in Iowa that addresses similar issues.
As of October 18, the remaining four companies—Calshi, Polymarket, Robinhood, and Underdog—had not filed lawsuits in Missouri federal court in response to the cease-and-desist orders they received.