Missouri AG Sends Cease-and-Desist Letters to Six Prediction Market Operators
Missouri AG Catherine Hanaway issued cease-and-desist letters on September 18 to Kalshi, Polymarket, Robinhood, Crypto.com, Novig, and Underdog — the broadest single-state enforcement sweep yet. The letters give platforms 30 days to comply or obtain state gambling licences. Missouri alleges sports event contracts are unlicensed sports wagering. One day earlier, Montana agreed to pause its own Kalshi enforcement pending the Ninth Circuit en banc process.
Missouri Attorney General Catherine Hanaway sent cease-and-desist letters on September 18 to six prediction market operators simultaneously: Kalshi, Polymarket, Robinhood Derivatives, Crypto.com, Novig, and Underdog. Each letter alleges that the company's sports event contracts constitute unlicensed sports wagering under Missouri law and gives 30 days to comply or obtain a licence from the Missouri Gaming Commission. Missouri has licensed sports betting via a 2022 ballot initiative, with DraftKings, FanDuel, BetMGM, and Caesars as the major licence holders. The Missouri Gaming Commission would be the licensing authority for any prediction market platform seeking to operate legally in the state. No platform has applied for such a licence anywhere in the US.
For UK readers, the Missouri action is closest in structure to a Gambling Commission formal warning that precedes a licence review or regulatory action. The C&D letter does not itself block operation — it gives a compliance window and signals that enforcement action will follow if compliance is not received. Missouri's decision to issue C&D letters to all six major operators simultaneously rather than targeting them sequentially is the most significant tactical shift in state AG enforcement strategy to date. Previous actions (Massachusetts, Nevada, Connecticut, New York) went after individual platforms. Missouri's sweep treats all CFTC-licensed prediction market platforms as equivalent targets regardless of their individual compliance postures or the states they have already settled with.
The Eighth Circuit — which covers Missouri — has not yet ruled on the prediction market preemption question. If Missouri's C&D letters lead to litigation, the Eighth Circuit could become the third circuit to weigh in, potentially amplifying the circuit split that already exists between the Third (for Kalshi) and the Ninth (for Nevada). Adding an Eighth Circuit ruling would increase the pressure on SCOTUS to take the case and resolve the conflict before every circuit has produced its own incompatible answer.
Missouri's action arrives the day after Montana agreed to pause its own enforcement against Kalshi pending the Ninth Circuit en banc process — a direct contrast in approach that illustrates the absence of state AG coordination on enforcement timing. Montana is in the Ninth Circuit and is pausing based on the en banc process; Missouri is in the Eighth Circuit and is escalating regardless of the Ninth Circuit's pending review. The different strategic approaches reflect different political and commercial contexts: Montana's gambling market is smaller, its tribal gaming interests are different from Missouri's licensed sportsbook operators, and the state's AG calculated that a negotiated pause costs less than contested litigation during the en banc window. Missouri's AG has made the opposite calculation — that escalating now, during NFL season, maximises state leverage before the legal question is resolved at the federal level.
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Recent updates
Utah Files Felony Charges Against Kalshi and Its Founders — Second State to Criminally Charge a Platform
Utah filed criminal charges against Kalshi and its two co-founders, Tarek Mansour and Luana Lopes Lara, on October 28 — 13 felonies and a misdemeanour, including a second-degree 'pattern of unlawful criminal activity' count and 12 counts of online gambling promotion. The charges stem from a September sting in which an undercover agent placed 12 sports wagers verified to be in Utah. The CFTC sued Utah the day before to block state enforcement, its tenth such suit. Utah is the second state after Arizona to criminally charge Kalshi, and the first to charge the founders personally. Kalshi called it a 'crazy overreach.'
NBA Names Kalshi and Polymarket Preferred Exchanges — Leaving the NFL Alone in Opposition
The NBA announced on October 26 that it has named Kalshi and Polymarket its 'preferred prediction market exchanges,' signed a non-binding memorandum of understanding with the CFTC on basketball integrity, and expanded its DraftKings deal to include prediction markets — the first league to extend a sportsbook partnership into the category. The exchange deals bar league and team personnel from trading NBA contracts, limit permissible markets, and require sharing suspicious-trading data, in exchange for NBA intellectual property and official data. The NBA joins MLB, the NHL, and MLS as partnered leagues, leaving the NFL as the lone major holdout — and the only league fighting the platforms in court.
CFTC Chair Says Agency Is Watching Prediction Markets for Manipulation Ahead of Midterms
CFTC Chairman Michael Selig said on October 23 that the agency is closely monitoring prediction markets for manipulation ahead of the November 3 midterms, and that it is separately scrutinising oil market trading tied to President Trump's announcements about the war in Iran. Combined midterm open interest on Kalshi and Polymarket stood at $250 million as of October 18, with Kalshi holding 84%. Selig acknowledged the agency often catches political figures trading 'oftentimes after the fact.' The remarks highlight the CFTC's dual role as both the platforms' federal protector and their manipulation watchdog.