Two federally regulated prediction-market exchanges have turned to court after Missouri ordered operators to stop offering sports event contracts without a state wagering license. North American Derivatives Exchange, which operates the Crypto.com-linked OG.com Prediction Markets platform, and Ludlow Exchange, which does business as Novig, filed separate federal complaints on October 16. The filings put a recurring question before judges: whether federal derivatives oversight displaces state sports-betting rules for these contracts. No ruling on either complaint was established by the filings.

The cases followed cease-and-desist letters sent by Missouri Attorney General Catherine Hanaway's office to six operators in September. Her office named Polymarket, Kalshi, Crypto.com, Novig, Underdog and Robinhood, calling their sports contracts unlicensed wagering under Missouri law. The state said operators must obtain authorization from the Missouri Gaming Commission, pay applicable taxes and observe a minimum participation age of 21. Missouri's sports-betting framework includes a 10% tax on gross wagering receipts, according to the attorney general's notice. Those are the state's positions, not findings against every recipient.

Related reporting: CFTC Moves to Define Event Contracts as Swaps

Two cases, one jurisdictional dispute

Novig's October 16 complaint in the Eastern District of Missouri names Hanaway and two gaming-commission officials. It says Missouri's threatened enforcement would force the exchange either to stop serving state residents or risk penalties. Novig argues that its event contracts are swaps traded on a Commodity Futures Trading Commission-designated contract market and therefore fall within the CFTC's exclusive jurisdiction. The company asks for declaratory relief and injunctions, including preliminary protection while the dispute proceeds. These are allegations and requested remedies, not an established interpretation of the law.

Nadex filed in Missouri's Western District under its OG.com Prediction Markets trading name. The docket identifies the complaint as a request for declaratory and injunctive relief against Hanaway and other state officials. The Block reported that Nadex also argues federal law preempts Missouri's wagering rules as applied to its contracts. Nadex says the state's letter was addressed to another Crypto.com entity and that Missouri has no remaining direct mobile sports-wagering licenses to issue. Those contentions have not been resolved by the court.

What the state and exchanges disagree on

Missouri's public notice describes sports event contracts as bets that should be regulated through the voter-approved state framework. It rejects the view that a federal derivatives designation automatically removes state authority over sports wagering. Novig's complaint takes the opposite position, citing the Commodity Exchange Act's grant of exclusive CFTC jurisdiction over qualifying transactions on designated contract markets. The central issue is how those federal provisions interact with Missouri's gambling law when the event being traded is a sports outcome.

The dispute matters beyond two platforms. A decision could affect whether an exchange needs separate state approval to offer sports contracts to Missouri residents, and it could influence similar challenges in other states. But the existence of a federal registration does not, by itself, settle the specific preemption issue in these lawsuits. Nor does Missouri's notice amount to a judicial determination that the exchanges have violated the law. For users, the immediate uncertainty is whether access to particular contracts will change as the cases or state enforcement proceed.

Other recipients have not taken the same route

As of its October 18 review of court records, The Block said Kalshi, Polymarket, Robinhood and Underdog had not filed parallel lawsuits in Missouri's two federal districts. That status is time-sensitive and does not establish how those companies will respond later. The next meaningful developments will be any requests for emergency court relief, state responses and judicial decisions. Until then, the filings show a live legal challenge to Missouri's enforcement position, not permission granted to keep operating or a final defeat for the state.

Sources

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