Federal Lawsuits Test Missouri’s Reach Over CFTC-Regulated Event Contracts
North American Derivatives Exchange and Ludlow Exchange sued Missouri on Oct 16, claiming CFTC oversight under the Commodity Exchange Act preempts the state’s 21+ age rule and 10% tax on sports event contracts. The suits cite a circuit split and pending Eighth Circuit Kalshi appeal. No injunction has issued yet.
SCCG Take — These parallel filings test whether federal commodities law can carve prediction markets out of state licensing regimes. A win would reduce regulatory overhead but invite further state pushback until the Supreme Court settles the jurisdictional line.
Two prediction-market operators filed federal lawsuits October 16 seeking to block Missouri from applying its sports wagering rules to their event contracts. North American Derivatives Exchange, which runs Crypto.com’s OG platform, and Ludlow Exchange, which operates Novig, argue that Commodity Exchange Act oversight by the CFTC preempts the state’s licensing, 21-year minimum age, and 10% tax requirements.
The suits follow cease-and-desist notices dated September 16 and 17 from Attorney General Catherine Hanaway’s office. After the 30-day compliance window closed, the state maintained that describing bets as event contracts does not exempt them from Missouri gambling law. Hanaway’s enforcement also cited underage access failures at five of six targeted firms; Novig was not included in that claim.
Core Legal and Procedural Differences
North American Derivatives Exchange sued in the U.S. District Court for the Western District of Missouri. It requests a declaratory judgment that federal law controls plus a permanent injunction. The complaint notes the cease-and-desist letter went to Foris DAX, Inc. rather than the exchange itself and argues state licensing is unavailable because Missouri’s constitution limits mobile sports wagering licenses to two already-issued permits.
Ludlow Exchange filed in the U.S. District Court for the Eastern District of Missouri as Ludlow Exchange, LLC v. Hanaway et al., case 4:26-cv-01780. Defendants include Hanaway, gaming official Michael Lear, and Jan Zimmerman. The complaint seeks preliminary and permanent injunctions, citing a related Kalshi appeal pending before the U.S. Court of Appeals for the Eighth Circuit, which covers Missouri.
Unresolved Circuit Split and Next Steps
Federal appeals courts remain divided on the boundary between CFTC authority and state sports wagering rules. The Sixth and Ninth Circuits have rejected Kalshi’s position; the Third Circuit has upheld it. The Eighth Circuit is now considering the same jurisdiction question in separate Iowa litigation that Novig cites for preliminary relief. As reported by Casino Beats, four other recipients of Missouri’s notices—Kalshi, Polymarket, Robinhood, and Underdog—had not sued in either Missouri federal district as of the latest docket review. Ludlow Exchange obtained CFTC-designated contract market status on June 16; Crypto.com’s OG platform launched in February 2026.
The Missouri cases will turn on whether the federal courts grant the requested injunctions and how the Eighth Circuit resolves the preemption issue already before it. Operators and investors tracking derivatives-based sports products will watch those rulings for signals on enforceable state boundaries.
Reporting: Casino Beats
Generated by SCCG’s automated editorial system from published source reporting. SCCG Management holds editorial responsibility.
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