Missouri Attorney General Catherine Hanaway has ordered six prediction-market companies to stop offering sports event contracts to state residents unless they obtain sports-wagering licenses, opening a new state-federal fight over whether the products are regulated derivatives or illegal betting.
The September 18 cease-and-desist letters went to Polymarket, Kalshi, Crypto.com, Novig, Underdog and Robinhood. In its announcement, the attorney general’s office said the contracts amount to unlicensed sports wagering under Missouri law and warned that continued operation could bring state enforcement.
The letters are an executive enforcement demand, not a court judgment. The companies retain the ability to contest Missouri’s interpretation, including the state’s assertion that federal commodities law does not displace its gambling rules.
Hanaway’s office said any company offering sports wagers in Missouri must be licensed by the Missouri Gaming Commission, pay required taxes and fees, and prevent customers younger than 21 from participating. Spectrum News reported that the state alleges five of the six companies lack safeguards adequate to keep minors from participating.
Missouri voters authorized regulated sports wagering through Amendment 2 in 2024. The official constitutional text assigns licensing authority to the Gaming Commission, bars wagering by people under 21 and imposes a 10% tax on adjusted gross sports-wagering revenue. After regulatory costs and required problem-gambling funding, proceeds are directed to public education.
The companies’ likely counterargument rests on a different regulatory system. The Commodity Futures Trading Commission describes prediction-market products as event contracts that may be structured as swaps or futures. Its consumer guide says federally regulated exchanges can operate nationwide and explains that contract prices reflect traders’ views about whether an event will occur.
That federal position does not resolve whether sports contracts escape state gambling laws. In a March rulemaking notice, the CFTC acknowledged that event contracts can fall into multiple legal categories and sought public input on contracts involving gaming or activity unlawful under state law. The notice underscored that the commission was considering future rules rather than announcing a final nationwide standard.
Courts have produced differing results as states challenge prediction markets. A federal court recently blocked Kalshi’s sports contracts on certain tribal lands, while other disputes have focused on whether federal regulation preempts state enforcement. Those cases do not directly decide Missouri’s authority, but they show why compliance may turn on litigation rather than the cease-and-desist letters alone. Missouri’s action adds six prominent platforms to that unresolved national contest over regulatory jurisdiction.
For Missouri customers, the immediate practical question is whether the six companies suspend sports markets, seek state licenses or sue. The attorney general did not announce a grace period in the public release. Conventional licensed sportsbooks remain governed by the state framework voters approved; the dispute concerns platforms that label their offerings event contracts and claim federal-market status.
