Missouri Attorney General Catherine Hanaway has ordered six prediction-market companies to stop offering sports-related contracts to Missourians, arguing the products are unlicensed sports betting dressed up in different packaging. The cease-and-desist letters went to Polymarket, Kalshi, Crypto.com, Novig, Underdog and Robinhood, giving each company 30 days to comply with state law.
According to kctv5.com, Hanaway said the companies' so-called event contracts constitute unlicensed sports betting under Missouri law. Any company that wants to offer sports wagering in the state must be licensed by the Missouri Gaming Commission, pay the required taxes and fees, and ensure no one under 21 can place a bet, she said. As reported by Spectrum News, the Missouri Gaming Commission was established specifically to oversee that licensing and taxation structure, which includes a 10% tax on sports betting gross receipts.
Age Verification at the Center of the Dispute
Hanaway said the companies either permit underage users to access their sites or lack adequate safeguards to prevent people under 21 from participating, per the kctv5.com report. Spectrum News reported that the attorney general's office identified five of the six companies as lacking safeguards to prevent younger people from participating, and that Missouri's sports wagering law, approved by voters through Amendment 2 in 2024, requires age verification for anyone placing a sports wager.
Hanaway said Missourians voted for a safe, well-regulated sports wagering market that supports public education and addresses problem gambling, according to Spectrum News. She argued companies cannot simply repackage sports bets as event contracts to sidestep that framework, and she said the Missouri attorney general's office will enforce state law against unlicensed companies offering sports betting regardless of how those products are labeled.
A Federal Preemption Fight Playing Out Nationwide
Central to the dispute is a legal argument the prediction-market industry has made in multiple states: that their contracts are federally regulated financial products, not gambling. Hanaway rejected that framing, arguing that sports event contracts do not qualify as swaps governed by the federal Commodity Exchange Act and that federal law does not preempt Missouri's regulatory authority in this area, Spectrum News reported.
Missouri's regulated sports betting market only recently came online. Voters approved Amendment 2 in 2024, and the legal, licensed market launched on December 1, 2025, the kctv5.com report noted. That framework permits wagering at authorized in-person locations as well as through licensed mobile and online platforms, but only for operators that meet the commission's licensing, tax and age-verification requirements.
Missouri Joins a Growing List of States Pushing Back
Missouri is far from alone in challenging how prediction markets have moved into sports wagering. Officials in 11 states have sent cease-and-desist orders to prediction-market companies, and litigation between the platforms and states has played out in at least eight states, according to Stateline. In Utah, Kalshi sued Gov. Spencer Cox and the state in federal court over anticipated enforcement efforts and proposed legislation, the outlet reported. A Kentucky attorney general page also states that lawsuits allege Kalshi and Polymarket are doing business there without a Kentucky gaming license or compliance with state regulations, though that claim comes from a search-result snippet tied to the Kentucky Attorney General's Office and should be treated cautiously pending further verification.
The industry group representing licensed sportsbooks has framed the stakes in financial terms. The American Gaming Association says prediction-market platforms are offering sports betting nationwide outside the state and tribal regulatory frameworks that govern operators like DraftKings and FanDuel, and argues the platforms should either exit the sports betting business or accept the same rules. The association has separately estimated that prediction markets diverted $250 million in local tax revenue in 2025, while Stateline cited a separate estimate from the same group putting lost sports-gambling tax revenue since prediction markets entered the space at more than $570 million — figures the trade group has presented in different contexts.
The scale of the money moving through these platforms helps explain why states are pushing back. Combined monthly global trading volume on prediction markets reached about $50.6 billion in July 2026, according to CBS Sports, compared with roughly $14 billion wagered monthly at legal U.S. sportsbooks in 2025. Stateline, citing its own figures, put prediction markets' monthly transactions at more than $13 billion, and noted the platforms operate without state oversight even in the 11 states where sports gambling remains illegal outright.
What Happens Next
The American Gaming Association has also flagged advertising practices as a concern, noting that nearly half of digital sports betting ads lacked responsible gaming messages in early 2026. It remains unclear whether Polymarket, Kalshi, Crypto.com, Novig, Underdog or Robinhood will respond to Missouri's letters or alter their offerings within the 30-day window Hanaway set. For now, the state's position is that any company facilitating event contracts tied to sports outcomes is subject to the same gambling laws as licensed sportsbooks, with no exceptions carved out for how the product is marketed.
