Missouri Targets Polymarket, Kalshi and Robinhood Over Sports Event Contracts
Missouri Attorney General Catherine Hanaway has issued cease-and-desist letters to six prediction market and trading platforms over sports-related event contracts offered to residents, arguing that the products constitute unlicensed sports wagering under state law. The affected companies are Polymarket, Kalshi, Crypto.com, Novig, Underdog and Robinhood.
The state is giving the platforms 30 days to stop offering sports-based event contracts in Missouri or risk enforcement action. The dispute centers on whether these products should be treated as sports bets regulated by state gambling laws or as financial contracts subject to federal oversight.
Missouri Challenges Prediction Market Operators
Hanaway's office argues that the companies are effectively operating unlicensed sports wagering businesses by allowing users to trade contracts tied to sporting events. In the letters, the attorney general challenges the platforms' position that their products are “event contracts,” sometimes described as “swaps,” governed by the Commodity Exchange Act (CEA) and subject to the exclusive jurisdiction of the Commodity Futures Trading Commission (CFTC).
Missouri disputes that interpretation and points to federal court rulings that it says have found certain sports-related contracts do not qualify as swaps exempt from state gambling oversight. The letters also contend that the platforms have avoided state requirements, including licensing fees and a 10% wagering tax applied to adjusted gross revenue from sports wagering conducted in Missouri.
Hanaway said the state intends to enforce its sports wagering rules and protect consumers. “Missourians voted for a safe, well‑regulated sports wagering market that supports public education and addresses problem gambling. Companies cannot repackage sports bets as ‘event contracts’ to avoid Missouri law. We will enforce the rules voters approved and protect consumers,” she said.
Thirty-Day Deadline for Sports Event Contracts
The cease-and-desist letters give the six companies 30 days to discontinue sports-based event contracts for Missouri users. Failure to comply could lead to further enforcement measures, according to the announcement described in the source report.
The dispute reflects a wider legal conflict between state authorities and prediction market operators over how sports-related contracts should be classified. States argue that some of these products function as wagers and should follow local gambling laws, while the platforms and federal regulators have asserted that the contracts fall under federal commodities oversight.
States and CFTC Clash Over Regulatory Authority
Missouri's action follows other efforts by states to clarify their authority over sports event markets. On September 2, New Jersey submitted a petition to the U.S. Supreme Court seeking a determination on whether federal law prevents states from regulating sports bets offered through markets registered with the CFTC.
The CFTC has maintained that it holds exclusive oversight over these contracts. In April, Chairman Michael S. Selig addressed states challenging that position, saying: “To any state that seeks to nullify federal law and seize authority over these markets, I say again: We will see you in court.”
The competing positions leave prediction market operators facing a regulatory dispute over whether sports event contracts are financial instruments under federal law or gambling products subject to state licensing, taxation and consumer-protection rules.
sourrce: news .bitcoin
Writer: Ethan Collins
Crypto Journalist
Ethan Collins reports on developments across the cryptocurrency and blockchain sector. His work covers market movements, protocol updates, regulatory changes, and emerging trends in digital assets.
He focuses on presenting complex topics in a clear and accessible manner for a broad readership.
Check out other news and articles on Google News
Disclaimer:
The articles on Hokanews are here to keep you updated on the latest buzz in crypto, tech, and beyond—but they’re not financial advice. We’re sharing info, trends, and insights, not telling you to buy, sell, or invest. Always do your own homework before making any money moves.
Hokanews isn’t responsible for any losses, gains, or chaos that might happen if you act on what you read here. Investment decisions should come from your own research—and, ideally, guidance from a qualified financial advisor. Remember: crypto and tech move fast, info changes in a blink, and while we aim for accuracy, we can’t promise it’s 100% complete or up-to-date.