Crypto.com and Novig Sue Missouri to Block Sports Prediction Market Crackdown
Published October 19, 2026, 6:15 PM PKT. Based on the two federal complaints filed October 16, 2026 (primary source material, summarized from court records by Unchained and The Block), Unchained's October 19, 2026 report (secondary source), The Block's October 18, 2026 report via TradingView (secondary source), CoinDesk's October 19, 2026 report (secondary source), and rg.org's October 19, 2026 docket review (secondary source). MABOnChain has not previously covered this story.
Two CFTC-regulated prediction market exchanges sued Missouri officials in federal court on Friday, October 16, 2026, asking judges to block the state from enforcing its sports wagering laws against their sports event contracts. Ludlow Exchange LLC, which operates as Novig, filed a 42-page complaint in the U.S. District Court for the Eastern District of Missouri as case 4:26-cv-01780, while North American Derivatives Exchange Inc., the CFTC-registered exchange behind Crypto.com's OG prediction markets platform, filed a 39-page complaint in the Western District of Missouri as case 4:26-cv-00969, according to Unchained, The Block and CoinDesk.
The two October 16 lawsuits
Novig's suit names Attorney General Catherine Hanaway, Missouri Gaming Commission Executive Director Michael A. Leara and commission Chair Jan Zimmerman, per Unchained's review of the filing. The exchange seeks a declaration that Missouri's gambling laws are preempted as applied to its exchange, along with preliminary and permanent injunctions. North American Derivatives Exchange makes the same core argument in its own complaint, naming Hanaway and members of the gaming commission, and seeks a declaratory judgment and a permanent injunction against enforcement, according to The Block. The Western District case has been assigned to U.S. District Judge David Gregory Kays, per rg.org's docket review.
The preemption argument
Both exchanges argue that the Commodity Exchange Act gives the Commodity Futures Trading Commission exclusive jurisdiction over swaps traded on a federally designated contract market, and that Missouri's gambling rules are preempted as applied to them. Novig holds that designation: the CFTC granted it designated contract market status in June 2026, the filing says, and Novig describes its event contracts as quintessential swaps under the Act, according to Unchained and coinlab.info's summary of the complaint. North American Derivatives Exchange argues Congress gave the CFTC exclusive jurisdiction over trading on such markets and that any Missouri enforcement would be preempted, per The Block. Novig's complaint also asks for an early injunction to hold the parties' legal positions in place, pointing to Kalshi's pending appeal in KalshiEX v. Bird at the Eighth Circuit, which covers Missouri, where briefing is set to wrap up on December 6, Unchained reported.
The September cease-and-desist letters
The lawsuits landed about a month after Hanaway's office sent cease-and-desist letters on September 16 and 17 to six prediction market operators: Robinhood, Underdog, Novig, Crypto.com, Kalshi and Polymarket, according to The Block. The letters told each operator it had 30 days to stop offering sports event contracts to Missourians or obtain a license from the Missouri Gaming Commission, which has overseen legal sports wagering since voters approved it in November 2024. Licensed sportsbooks pay a 10% tax on gross receipts and must keep out anyone under 21; Hanaway's letter to Crypto.com also flagged that the platform lets users as young as 18 trade, The Block reported. Missouri's constitution allows only two direct mobile sports wagering licenses and both have already been awarded, making formal compliance structurally impossible in the exchange's view, per the complaint summarized by The Block. Application fees can run up to $500,000, according to coinlab.info. On September 18, Hanaway wrote on X that companies cannot repackage sports bets as event contracts to evade Missouri law. A footnote in the North American Derivatives Exchange complaint says the attorney general's office incorrectly addressed its cease-and-desist letter to Foris DAX, Inc., which the letter called Crypto.com, rather than to the exchange itself, per Unchained.
Kalshi, Polymarket, Robinhood hold off
The other four recipients of the September letters have not gone to court. Kalshi, Polymarket, Robinhood and Underdog had not filed suit in Missouri's Eastern or Western federal districts as of Sunday, according to a review of court records by The Block, and Unchained's Monday check of federal court records showed no suits from any of the four. According to Novig's complaint, the state's letter gave the company until October 17 to comply, and no enforcement action against either exchange had been announced as of Monday. The Missouri filings open a new front in the broader fight over who regulates prediction markets, with courts divided on the federal preemption question and the Eighth Circuit's Kalshi appeal likely to set binding precedent for the state.
This article is news reporting and is not investment advice.
Sources
- Ludlow Exchange LLC (Novig) complaint, filed October 16, 2026, U.S. District Court for the Eastern District of Missouri, case 4:26-cv-01780, primary source (via court records summarized by Unchained and The Block): 42-page filing against AG Catherine Hanaway, MGC Executive Director Michael A. Leara and Chair Jan Zimmerman; seeks declaration that Missouri gambling laws are preempted plus preliminary and permanent injunctions; CFTC designated contract market status granted June 2026; event contracts described as swaps; October 17 compliance deadline in the state's letter; cites KalshiEX v. Bird appeal at the Eighth Circuit
- North American Derivatives Exchange Inc. (Crypto.com) complaint, filed October 16, 2026, U.S. District Court for the Western District of Missouri, case 4:26-cv-00969, primary source (via court records summarized by Unchained, The Block and rg.org): 39-page filing against Hanaway and gaming commission members, assigned to Judge David Gregory Kays; argues the Commodity Exchange Act gives the CFTC exclusive jurisdiction and preempts state enforcement; seeks declaratory judgment and permanent injunction; footnote says the cease-and-desist was incorrectly addressed to Foris DAX, Inc.
- Unchained, October 19, 2026, secondary source: both suits filed Friday October 16 in separate federal districts; 42-page and 39-page complaints; Hanaway's September 18 X statement; 10% tax and under-21 rules for licensed books; no enforcement action announced as of Monday; no suits from Kalshi, Polymarket, Robinhood or Underdog as of Monday
- The Block via TradingView, October 18, 2026, secondary source: letters sent September 16 and 17 with 30-day window; Missouri voters approved legal sports wagering in November 2024; letter to Crypto.com flagged 18-year-old access; only two direct mobile licenses exist and both are awarded; none of the four other operators had filed as of Sunday
- CoinDesk, October 19, 2026, secondary source: the two exchanges were the only two of six warned operators to file federal suits in Missouri as of Sunday; 30-day compliance window; 10% wagering tax and 21-year age minimum
- rg.org, October 19, 2026, secondary source: Western District case 4:26-cv-00969-DGK assigned to Judge David Gregory Kays; CourtListener search of both districts turned up only the Crypto.com and Novig cases
- coinlab.info, October 2026, secondary source: application fees up to $500,000; Novig's contracts described as quintessential swaps under the Commodity Exchange Act
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