Novig and Crypto.com File Federal Suits to Block Missouri Enforcement of Sports Event Contract Restrictions

Novig and Crypto.com filed separate federal lawsuits on October 16 challenging cease-and-desist letters from Attorney General Catherine Hanaway. The letters ordered the companies to stop offering sports event contracts to Missouri residents or obtain state authorization under gambling laws. The complaints assert that the Commodity Futures Trading Commission holds exclusive jurisdiction under the Commodity Exchange Act.

Hanaway sent the letters on September 16 and 17 to six operators: Novig, Crypto.com, Kalshi, Polymarket, Robinhood, and Underdog. Each received 30 days to comply. Missouri voters approved Amendment 2 in November 2024 to legalize sports wagering. Licensed operations began December 1, 2025, subject to a 10% tax on gross receipts and a minimum age of 21. The state cited failures to block users as young as 18 on some platforms.

Core Federal Preemption Arguments in the Complaints

Novig filed through Ludlow Exchange LLC in the Eastern District of Missouri. It seeks preliminary and permanent injunctions against officials including the Missouri Gaming Commission. The suit asks the court to maintain the current situation pending the Eighth Circuit’s review of a related Kalshi dispute from Iowa. Crypto.com filed via North American Derivatives Exchange in the Western District. Its complaint seeks a declaratory judgment and injunction. It notes the cease-and-desist letter was incorrectly addressed and that Missouri’s constitution limits mobile sports wagering licenses to two, both already issued.

Hanaway stated: “Companies cannot repackage sports bets as ‘event contracts’ to evade Missouri law.” The state maintains these contracts do not qualify as swaps under federal law and do not displace its authority. As reported by World Casino News, the filings form part of actions against regulators in 18 states. The Sixth and Ninth Circuits have ruled against similar claims by Kalshi. The Third Circuit has sided with operators. The Eighth Circuit’s pending Iowa decision could affect the Missouri cases.

Where the Risk Lies

The circuit split creates uneven regulatory exposure across jurisdictions. Operators face continued enforcement risk in states that reject federal preemption. A final resolution may require Supreme Court review or legislative clarification on the boundary between derivatives and gambling.

Reporting: World Casino News

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