Missouri AG issues cease-and-desist orders to six prediction markets
COLUMBIA, Mo. (KMIZ)
Missouri Attorney General Catherine Hanaway issued cease-and-desist orders to six online prediction market operators, demanding they stop offering sports "event contracts" to state residents without a sports wagering license, according to a Friday press release from her office.
The letters were sent to Polymarket, Kalshi, Crypto.com, Novig, Underdog and Robinhood. The AG's Office claims operating sports-related contracts is considered unlicensed sports gambling under Missouri law.
ABC 17 News reported on Thursday the rise in prediction markets could result in significant losses in tax revenue. Previous reporting shows prediction markets have argued their event contracts are financial products subject to federal regulation instead of state-regulated sports wagers.
"Missourians voted for a safe, well‑regulated sports wagering market that supports public education and addresses problem gambling," Hanaway said in the release. "Companies cannot repackage sports bets as ‘event contracts’ to avoid Missouri law. We will enforce the rules voters approved and protect consumers."
Under Amendment 2, which Missouri voters passed in November 2024, the Missouri Gaming Commission oversees sports wagering. The voter-approved framework imposes a 10% tax on sports betting gross receipts to help fund public education and sets the legal gambling age at 21.
Prediction market platforms let users trade contracts tied to sports game outcomes. The AG's office cited claims that these platforms either allow underage users to access sports contracts or lack age-verification methods.
In the letters, the state rejected the claims made that event contracts do not qualify for federal financial regulations or state oversight by stating that online sports wagering platforms remain subject to state gambling laws.
"Federal law does not preempt state law in this area, and sports “event contracts” do not qualify as “swaps” governed by the federal Commodity Exchange Act, as frequently claimed by illegal online sportsbooks," Hanaway stated in the letters.
Hanaway called on the six companies to comply with state law, or the office indicated that failure to comply will lead to legal action taken.
"Missouri expects all online sports wagering platforms to comply with Missouri’s sports betting laws, and Kalshi is no exception," Hanaway wrote in her letter to Kalshi. "The only immediate solutions available to Kalshi are to bring its operations into compliance with Missouri law or to stop offering its online sports wagering platform to individuals located in the State of Missouri. Otherwise, the State of Missouri will take legal action against Kalshi."
ABC received a statement from the Missouri Gambling Commission stating that prediction markets are sports betting platforms.
"The MGC will await the outcome of several court cases at the federal and state levels to help determine action or inaction by the agency in the future," Elizabeth Hoffman, a spokesperson for the Gaming Commission, said. "We do believe there is an impact of prediction markets on sports wagering revenue; however, because they are not regulated, we have no idea what level that would be."
Check back for updates.
