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Missouri Attorney General Orders Prediction Market Exchanges to Curtail Offerings

Legal Writer

Publish Date: Sep 21, 2026

Fact checked by: Matt Moreno

Key Points

Missouri Attorney General Catherine Hanaway sent letters to six exchange operators
Letters demand platforms stop processing trades of sports event contracts from people in the state
Similar enforcement actions have prompted lawsuits in the past

Missouri Attorney General Catherine Hanaway has joined the number of state attorneys general at odds with prediction market exchange operators over their provision of sports event contract trading. Hanaway has ordered the operators of six exchanges to cease accepting those trades from people in Missouri.

Such actions have nearly always been forerunners of litigation in federal courts with the attorneys general as defendants. New filings from at least one of the operators and potentially the federal government as well could surface in federal court at any moment.

Missouri attorney general targets sports event contracts in demand

Hanaway announced her correspondence affecting prediction markets on Friday. The recipients include several of the most popular exchanges in the United States.

Crypto.com
Kalshi
Novig
Polymarket
Robinhood
Underdog

The demands only address sports event contract trading on these exchanges. Hanaway has ordered the platforms to stop offering such trading in Missouri, though.

Hanaway bases her demands on court rulings that have equated sports event contract trading with sports wagering. Under Missouri law, Hanaway points out, it's illegal to offer such gambling without a license.

None of these exchanges have secured such licensure from the Missouri Gaming Commission. Hanaway states that continued non-compliance could lead to further enforcement actions.

However, litigation could preempt any such enforcement.

Lawsuits likely forthcoming from CFTC, exchange operators

Nearly every state attorney general or gambling regulator who has to date moved to restrict prediction market activity has become a defendant in a lawsuit initiated by an exchange operator or the US Commodity Futures Trading Commission (CFTC). Complaints of this kind have followed nearly identical tactics as well.

The arguments from the complainants focus on federal statutes governing prediction market activity. They argue that those federal laws preempt the intervention of state authorities.

Additionally, the complaints have countered that sports event contracts are "swaps" under federal law instead of forms of gambling. Enforcement actions like Hanaway's are therefore unconstitutional based on those arguments.

Courts have been split on their acceptance of those arguments, as Hanaway's statement alludes to. None of them have directly concerned Missouri to date but that could change.

Supreme Court decisions could settle dispute in Missouri

Even if the CFTC and the exchange operators don't sue Hanaway, other litigation could limit enforcement actions in Missouri in terms of prediction markets. There are currently three petitions before the US Supreme Court involving similar disputes.

The Supreme Court has not yet announced whether it will review either decision those three requests center on. If it does take up one of the cases, the forthcoming opinion will have national ramifications.

In either case, the main questions that would be before the justices are whether sports event contracts are gambling and how much power state governments have to regulate such contract trading. The answer to the second question will heavily rely on the court's response to the first question.

An affirmative ruling for state officials would empower Hanaway and her colleagues, while a strong ruling in the exchange operators' favor would essentially completely handcuff them. Until further guidance comes from the high court, though, the situation in Missouri is likely to play out in a district court for the state.

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