Two prediction market operators are suing Missouri after the state issued a cease-and-desist order in September.
- Novig launched its sports-focused prediction market product in August.
- In September, the Missouri AG issued cease-and-desist orders to 6 prediction market sites.
- Novig and Crypto.com filed lawsuits in the US District Court in Missouri.
Crypto.com and sports-focused company Novig filed lawsuits Friday against the state of Missouri.
UPDATE: Crypto dot com also sues Missouri to block enforcement of state laws against its sports prediction markets, filing in the Western District of Missouri rather than the Eastern District, where Novig sued—ensuring that the two cases aren’t assigned to the same judge. https://t.co/S0o2RDYG4I
— Daniel Wallach (@WALLACHLEGAL) October 16, 2026
Novig launched its sports-focused prediction market product in August. It was an instant hit, generating $125 million in trading volume during its first week. The prediction market news also generated a lot of buzz after a scantily clad actress Sydney Sweeney promoted the prediction market’s debut.
The attention Novig got from Missouri’s Attorney General Catherine L. Hanaway was less welcome. Last month, the AG’s office sent Novig, Crypto.com, and six other prediction market operators a cease-and-desist order. They could either stop offering sporting event contracts in the Show-Me State or apply for a license from the Missouri Gaming Commission, paying the associated state taxes and fees.
“Companies cannot repackage sports bets as ‘event contracts’ to avoid Missouri law,” Hanaway stated. “Any company offering sports wagering in Missouri must be licensed by the Missouri Gaming Commission, pay the required taxes and fees, and ensure no one under 21 can place a bet.
Novig and Crypto.com chose the unspecified third option of taking their case to the court.
Lawsuits filed in different districts
Novig filed a lawsuit against the Missouri AG and members of the Missouri Gaming Committee. Novig is bringing the legal action to keep the state from “enforcing Missouri’s preempted gambling and sports-wagering laws against federally regulated transactions that Congress placed within the exclusive jurisdiction of the Commodity Futures Trading Commission (CTFC).”
Novig’s case is similar to those of other prediction market providers, which are battling the states over jurisdiction. They claim that their federal regulation preempts them from having to conform to state gambling laws and regulators.
Crypto.com followed suit, filing its lawsuit in the Western District of Missouri, to ensure the cases aren't assigned to the same judge, according to gaming lawyer Daniel Wallach.
The fact that Missouri is open to licensing prediction market operators as legal online sports betting providers begs the question: Why wouldn’t prediction markets choose that option? Is the 10% tax that much of an impediment? Or are they holding out for a potential U.S. Supreme Court decision that may make all their state-related issues disappear?
At this point, prediction market operators appear to be placing all their eggs in one legal basket – hoping that their CFTC affiliation will allow them to sidestep state gambling laws. So far, that legal strategy has yielded mixed results.
In higher court decisions, both the Ninth Circuit and Sixth Circuit Court of Appeals have sided with the states, while the Third Circuit sided with prediction markets. If the cases between Novig, Crypto.com, and Missouri end up in appeal, that would cue up the Eight Circuit Court of Appeals, which has yet to decide a prediction market case.
