Crypto.com and Novig Sue Missouri to Halt Sports Event Contract Ban

Crypto.com’s prediction market trading platform and Novig have filed a lawsuit in federal court against Missouri officials, seeking to prohibit the state from enforcing actions against their sports event contracts. Missouri Attorney General Catherine Hanaway issued a cease-and-desist letter in September to six platforms, including the two companies, demanding that they stop offering sports event contracts to state residents within 30 days or obtain a state license and pay a 10% tax. Crypto.com claims that the cease-and-desist letter was incorrectly sent to Foris DAX, Inc., rather than the trading platform itself; the Missouri Constitution only allows for the issuance of two mobile sports wagering licenses, both of which have already been issued, making it unfeasible to obtain a license. The two platforms argue that the Commodity Exchange Act grants the CFTC exclusive jurisdiction, which takes precedence over state law. Kalshi, Polymarket, Robinhood, and Underdog also received cease-and-desist letters in September, and as of Sunday, no lawsuits had been filed in Missouri federal court. Due to discrepancies among several federal appellate courts regarding whether federal law takes precedence over state regulation, Novig has requested the court to issue a preliminary injunction during the litigation to maintain the status quo.

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