Crypto.com and Novig Sue Missouri as Market Leaders Hold Back — Eighth Circuit Now in Play via Iowa
Crypto.com and Novig filed federal lawsuits on October 16 challenging Missouri's cease-and-desist orders, arguing their sports event contracts fall under exclusive CFTC jurisdiction. The suits came as Missouri's 30-day compliance window closed. Notably, the market leaders — Kalshi, Polymarket, Robinhood, and Underdog — have not sued; Missouri said it is in 'ongoing discussions' with Kalshi. The outcome is tied to the Eighth Circuit, which is now weighing the same preemption question in Kalshi's appeal of a preliminary injunction denial in Iowa — the fourth federal circuit to take up the prediction market question.
Crypto.com and Novig filed federal lawsuits against Missouri on October 16, 2026, the day Missouri's cease-and-desist compliance window began to close, challenging the orders that Attorney General Catherine Hanaway issued to six operators on September 18. The companies argue that their sports event contracts fall under the exclusive jurisdiction of the CFTC and cannot be regulated under state gambling law. Novig is seeking both preliminary and permanent injunctions to block Missouri's enforcement. Missouri's cease-and-desist letters had required each operator to obtain a Missouri Gaming Commission license and pay the state's 10% wagering tax, or stop offering sports contracts in the state. The two companies that sued are relatively small operators for whom the suit is a bet-the-product decision; the suits keep them in the Missouri market while the preemption question is litigated.
The more revealing fact is who did not sue. Kalshi, Polymarket, Robinhood, and Underdog — including the two market leaders — did not file litigation against Missouri. Missouri said in early October that it was in 'ongoing discussions' with Kalshi, with a spokesperson indicating that further investigative steps or a lawsuit could follow. The restraint by the market leaders is a notable contrast to their posture in other states, where they have aggressively counter-sued. One explanation is tactical: with the Eighth Circuit already set to rule on the same question in the Iowa case, the leaders may see little value in opening a separate Missouri front when the circuit-level ruling will govern Missouri regardless. Another is that the smaller operators, lacking the leaders' broader legal and political resources, cannot afford to simply wait out the appellate process and need an immediate injunction to keep operating. The split mirrors the pattern seen in Connecticut, where smaller operators withdrew while Kalshi and Polymarket held firm.
The Eighth Circuit is the critical forum. Kalshi sued Iowa seeking a preliminary injunction against state enforcement (KalshiEX LLC v. Bird, S.D. Iowa), and Judge Stephen H. Locher denied the injunction in September 2026, finding Kalshi unlikely to succeed on its preemption argument. Kalshi filed an interlocutory appeal to the Eighth Circuit, docketed as No. 26-2874, with its opening brief due November 6. The Eighth Circuit's eventual ruling will bind federal courts across the circuit, which includes Iowa, Missouri, and five other states — meaning the Iowa appeal will effectively decide the Missouri litigation as well. Novig's complaint explicitly references the pending Iowa appeal and asks the court to preserve the status quo while the Eighth Circuit considers the federal jurisdiction question. The Missouri cases and the Iowa appeal are now functionally linked.
The Iowa appeal makes the Eighth Circuit the fourth federal circuit to take up the prediction market preemption question, after the Third (which ruled for Kalshi), the Ninth, and the Sixth (both of which ruled against). If the Eighth Circuit rules against Kalshi, the circuit split would widen to 3-1, strengthening the case for Supreme Court review and further isolating the Third Circuit's pro-Kalshi position. If it rules for Kalshi, the split would even to 2-2, creating a more balanced conflict that still demands SCOTUS resolution but without a clear directional trend. Either way, the proliferation of circuit rulings reinforces what has become the central dynamic of the prediction market legal fight: the question is being litigated in parallel across the federal judiciary, the rulings are accumulating faster than any single case can resolve them, and only the Supreme Court can produce a binding national answer. The Eighth Circuit's ruling, expected in the coming months, is the next major milestone in that sequence, and it will determine the fate of the Missouri enforcement campaign regardless of which individual operators chose to sue.
Operators mentioned in this article
Recent updates
Ohio Escalates Post-Sixth Circuit — Cease-and-Desist to 10 Operators, but Platforms Keep Operating
Emboldened by its Sixth Circuit win, Ohio escalated enforcement against prediction markets. Governor Mike DeWine and the Ohio Casino Control Commission issued cease-and-desist letters dated October 2 to 10 operators, including Polymarket and Robinhood, with an October 16 compliance deadline and penalties up to the value gained from contracts. Kalshi was excluded because a court order already covers it. As of October 20, platforms were continuing to operate in Ohio despite the deadline passing. Polymarket has sued the Commission and Ohio AG Andy Wilson on Commerce Clause and CEA-preemption grounds; Wilson is expected to sue non-compliant operators.
Midterm Election Betting Tops $220M — Double the Entire 2024 Cycle — as Public Opposition Mounts
Traders have wagered more than $220 million on the 2026 congressional midterms across Kalshi and Polymarket, more than double the $92 million bet across the entire 2024 cycle, according to a Reuters analysis of Anti-Corruption Data Collective data published October 14. The 2026 cycle has more than 21,000 individual markets, up from 463 tracked in 2024. Volume is concentrated in a few races, led by the Texas Senate contest. The growth comes despite a Reuters/Ipsos poll finding that most Americans oppose using prediction markets to bet on elections, and amid continuing concern from election officials about integrity and insider trading.
Taiwan and Norway Move Against Kalshi — International Blocks Spread on Two Different Legal Theories
International enforcement against prediction markets accelerated in mid-October. A New Taipei District Court ordered Taiwan to block Kalshi and Coinbase on October 15 under Taiwan's election law, which prohibits profit-driven gambling tied to election results, roughly six weeks before Taiwan's November 28 local elections. Separately, Norway's gambling regulator Lotteritilsynet proposed DNS-blocking 62 unlicensed sites including Kalshi and Polymarket, with operators given until October 15 to respond. The two actions rest on different legal theories — election-integrity law in Taiwan, gambling-licensing law in Norway — but both add to the growing list of countries treating the platforms as unauthorized.