Crypto.com and Novig sue Missouri over sports event contracts

Crypto.com’s exchange and Novig sued Missouri officials on Oct. 16, asking federal courts to block enforcement of state sports-wagering laws against their sports event contracts, The Block reported. The suits came as deadlines set by Attorney General Catherine Hanaway for six prediction-market firms to stop offering the contracts or obtain state licenses expired.

What are the companies asking the courts to do?

North American Derivatives Exchange, the CFTC-registered exchange behind Crypto.com’s OG.com Prediction Markets, sued in the Western District of Missouri. The Block reported that the exchange seeks a court declaration and permanent injunction, arguing that federal law gives the Commodity Futures Trading Commission exclusive jurisdiction over its contracts.

Novig’s exchange operator, Ludlow Exchange LLC, filed in the Eastern District. Its complaint asks for preliminary and permanent injunctions, arguing that federal law preempts Missouri’s gambling and sports-wagering laws as applied to its federally regulated contracts.

What did Missouri require?

Hanaway sent cease-and-desist letters on Sept. 16 and 17, giving each recipient 30 days to stop offering sports event contracts to Missourians or obtain a license from the Missouri Gaming Commission and pay the state’s 10% wagering tax, according to The Block. Her letter to Crypto.com also said the platform allowed users as young as 18 to trade, while Missouri’s minimum age for sports betting is 21.

Crypto.com’s exchange says Hanaway sent its letter to Foris DAX Inc. instead of the exchange, and that Missouri has no sports-wagering licenses left to issue, The Block reported. Those points are allegations in the company’s case, not court findings.

Have the other firms sued?

Kalshi, Polymarket, Robinhood and Underdog had not filed suit in either of Missouri’s federal districts as of Oct. 18, according to The Block’s review of court records. The four firms received the same cease-and-desist letters as Crypto.com and Novig.

Sources

• The Block reported — theblock.co
• complaint — storage.courtlistener.com