Missouri AG Sends Cease-and-Desist Letters to Six Prediction Market Operators
Missouri Attorney General Catherine Hanaway issued cease-and-desist letters on September 18 to six prediction market operators — Kalshi, Polymarket, Robinhood, Crypto.com, Novig, and Underdog — alleging their sports event contracts constitute unlicensed sports wagering under Missouri law. The letters give platforms 30 days to comply or obtain licenses from the Missouri Gaming Commission. Missouri is the broadest multi-platform C&D action to date, targeting all major operators simultaneously. The action arrives one day after Montana and Kalshi filed a joint stipulation in which Montana agreed to pause enforcement while Ninth Circuit en banc review is pending.
Missouri Attorney General Catherine Hanaway sent cease-and-desist letters on September 18, 2026 to six prediction market operators: Kalshi, Polymarket, Robinhood Derivatives, Crypto.com, Novig, and Underdog. The letters allege that each company's sports event contracts constitute unlicensed sports wagering under Missouri law and direct the platforms to stop offering those contracts to Missouri residents within 30 days or obtain licenses from the Missouri Gaming Commission. Hanaway said companies 'cannot repackage sports bets as event contracts to avoid Missouri law.' Missouri has a licensed sports betting market, established by a 2022 ballot initiative; licensed operators include DraftKings, FanDuel, BetMGM, and Caesars. The Missouri Gaming Commission, which oversees licensed operators, would have authority to license prediction market platforms under the state's existing sports wagering framework — though no prediction market platform has applied for such a license in any state.
The breadth of Missouri's action is notable. Previous state enforcement actions targeted one or two platforms at a time: Massachusetts sued Kalshi; Nevada's Gaming Control Board pursued Kalshi; New York targeted Kalshi; Wisconsin named five platforms but in a single lawsuit. Missouri's simultaneous C&D letters to six separate companies — covering the full range of major CFTC-registered prediction market operators — represents the most comprehensive single-state enforcement sweep yet. Novig and Underdog, smaller platforms that had not been the subject of major state enforcement actions previously, are now included alongside Kalshi, Polymarket, and Robinhood. Including Crypto.com, which was also named in Wisconsin's lawsuit, Missouri's action signals a state AG strategy of capturing all CFTC-licensed prediction market operators rather than targeting individual platforms sequentially.
The 30-day compliance window runs until approximately October 18, 2026 — three weeks into the NFL regular season, and two weeks before the Ninth Circuit responds to Kalshi's en banc petition. Missouri joins a queue of states whose enforcement actions have been met with either CFTC emergency orders (New York, Michigan) or CFTC lawsuits (Arizona, Connecticut, Illinois, Wisconsin). If the platforms do not comply and instead fight Missouri's C&D letters in court, Missouri is likely to follow the pattern: file for a preliminary injunction, face a counter-suit or CFTC intervention, and await a circuit court ruling. The Eighth Circuit — which covers Missouri — has not yet heard a prediction market case. If Missouri obtains a PI or files suit, the Eighth Circuit could become the third circuit to rule on the CEA preemption question, potentially adding to or resolving the circuit split.
The Missouri action arrives as two opposing state trends are visible in the same week. Montana, which had also issued C&D letters to Kalshi and pursued enforcement, filed a joint stipulation with Kalshi on September 17 agreeing to pause all enforcement while the Ninth Circuit en banc process proceeds. Missouri's escalation, issued the following day, illustrates that there is no uniform state AG strategy: some states are pausing, some are escalating, and the timing is heavily influenced by each state's political calendar, its proximity to the Ninth Circuit's jurisdiction, and the posture of its local gambling industry. Missouri's licensed sportsbook operators have commercial incentive to see prediction market competition curtailed; the Missouri Gaming Commission and the licensed operators are natural allies for the AG's enforcement position. The NFL season, which generates the prediction market sports contracts that states are contesting, gives both sides urgency: platforms want to operate during peak season, and states want to act before the season generates maximum revenue outside their licensed framework.
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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 misdemeanor, 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 of 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 scrutinizing 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 attempting to trade 'oftentimes after the fact.' The remarks highlight the CFTC's dual and somewhat conflicting role as both the platforms' federal protector and their manipulation watchdog, at a time when the agency has shed enforcement staff.