Missouri orders prediction markets to stop offering sports contracts
Missouri Attorney General Catherine Hanaway, a Republican, has sent cease-and-desist letters to six prediction market companies, arguing that their sports-related event contracts amount to unlicensed sports wagering under state law.
TL;DR
- Missouri Attorney General Catherine Hanaway sent cease-and-desist letters to six prediction market companies.
- The letters argue that sports-related event contracts offered by these companies are unlicensed sports wagering under state law.
- Companies ordered to comply with Missouri law or stop offering sports event contracts to Missourians include Polymarket, Kalshi, Crypto.com, Novig, Underdog, and Robinhood.
- Missouri law requires sports wagering operators to be licensed, pay taxes, and prevent individuals under 21 from wagering.
- Prediction markets face legal challenges regarding whether their contracts are financial derivatives regulated by the CFTC or gambling products regulated by states.
- Federal courts have issued conflicting rulings on the preemption of state gambling laws by the Commodity Exchange Act, creating a circuit split.
- The U.S. Court of Appeals for the 3rd Circuit sided with Kalshi, finding federal preemption for its sports contracts, while the 9th Circuit ruled against Kalshi in a Nevada case.