Crypto.com’s prediction-market exchange and Novig filed separate federal lawsuits against Missouri officials on Oct. 16, challenging the state’s attempt to enforce its gambling laws against sports event contracts. The parallel cases put the clash between federal commodities oversight and state sports-betting regulation before two federal courts in Missouri.
Novig and Crypto.com file separate federal challenges
Ludlow Exchange LLC, which does business as Novig, filed its complaint in the U.S. District Court for the Eastern District of Missouri against Attorney General Catherine Hanaway and Missouri Gaming Commission officials. Novig is seeking to block enforcement of state gambling laws against its sports event contracts, according to the court docket.
Crypto.com’s prediction-market exchange brought a separate suit against Missouri officials in the U.S. District Court for the Western District of Missouri on the same day, according to reporting on the filings by The Block. The cases are separate proceedings, but both challenge Missouri’s authority to apply its sports-wagering rules to the companies’ contracts.
Missouri’s cease-and-desist orders triggered the litigation
The lawsuits follow a Sept. 18 enforcement announcement by Hanaway’s office. The attorney general said cease-and-desist letters had been sent to six operators, including Crypto.com and Novig, alleging that their sports event contracts amounted to unlicensed sports wagering.
The letters demanded that the operators either stop operating in the state or obtain Missouri licenses. The Attorney General’s Office characterized the activity as unlawful sports wagering rather than a federally regulated event-contract market.
CFTC oversight versus Missouri sports-betting rules
At the center of both disputes is which regulator has authority over the contracts. The companies argue that federal commodities law gives the Commodity Futures Trading Commission exclusive jurisdiction over their event contracts, The Block reported.
Missouri takes the opposing view: it says the contracts are sports bets and therefore must comply with state requirements for licensing and age restrictions, as well as a 10% wagering tax. The two lawsuits now ask federal courts to determine whether the state can enforce those rules against the operators’ sports event contracts.
