Kalshi sues Missouri over sports event contract cease-and-desist order
Kalshi has become the third prediction market operator to challenge Missouri in federal court, arguing compliance with the state's demand to seek a licence is not achievable.
Kalshi has filed a federal lawsuit against Missouri, arguing that it has no practical way to comply with a cease-and-desist notice ordering it to either stop offering sports event contracts in the state or obtain a wagering licence.
The filing, lodged on Tuesday 27 October, makes Kalshi the third prediction market platform to sue the state after Attorney General Catherine Hanaway issued cease-and-desist letters last month to six firms offering sports event contracts: Crypto.com, Kalshi, Novig, Polymarket, Robinhood and Underdog.
Kalshi contends that Missouri's attempt to force it offline amounts to state regulation of a product it is entitled to offer nationally under the Commodity Exchange Act, subject only to oversight by the Commodity Futures Trading Commission. The company is asking the court for a temporary restraining order, a preliminary injunction and a permanent injunction barring Hanaway and the Missouri Gaming Commission from taking further enforcement action against it.
Hanaway's office announced the cease-and-desist letters on 16 September, telling the six platforms their sports contracts amounted to unlicensed sports betting and ordering them to stop serving Missouri customers unless they secured a licence from the Gaming Commission. Missouri launched its regulated sports betting market in December 2025, with operators paying licensing fees, a 10% tax on adjusted gross revenue, and a minimum wagering age of 21.
Hanaway told local broadcaster KFVS 12 in September that she expected some recipients might take the state to court, as operators have done elsewhere. Novig and Crypto.com each sued Missouri earlier in October seeking to stop enforcement before it started.
Kalshi's complaint argues that stopping operations in Missouri would conflict with the CFTC's impartial access requirement and take the company out of step with federal law. Its lawyers wrote that halting sports event contracts for Missouri customers "would bring Kalshi out of compliance with federal law."
The company says the alternative route — applying for a state licence — is effectively closed to it. Missouri's two untethered mobile wagering licences have already gone to DraftKings and Circa Sports, and Kalshi says it does not meet the criteria for a tethered licence, which under state rules must be linked to an in-state casino or sports team.
Kalshi's filing adds that even securing a licence would not resolve the conflict, since Missouri's state-specific rules for operators cannot be squared with its obligations under federal commodities law.
The lawsuit also accuses Missouri officials of reneging on a compliance deadline. Kalshi says the state had agreed to extend its original 16 October deadline to 30 October, but that the Solicitor General told the company on 27 October that Missouri would not commit to holding off enforcement, leaving it exposed to action at any time.
Responding to questions from SBC Americas, a spokesperson for Hanaway's office said that betting through an online prediction market should be subject to the same rules as a wager placed at a casino, adding that "Missourians voted to subject sports betting to licensing and taxation rules." The spokesperson said the Attorney General intends to continue enforcing the law and expects the federal courts to allow her to do so.