Missouri Orders Prediction Markets to Stop Offering Sports Contracts

Another state has entered the legal hotbed of prediction market platforms: Missouri. 

Missouri Attorney General Catherine Hanaway has sent cease-and-desist notices to every prediction market platform operating in the state, saying that the sports contracts are unlicensed sports betting. 

“The way that they take contracts, as what they would call them, I call them bets online on sporting events is just like how FanDuel and others do it,” Hanaway said to Heartland News. 

Missouri Sends Cease-and-Desist Letters to Six Platforms

Hanaway's office released a press release and sent six letters to operators. The letters were sent to Polymarket, Kalshi, Crypto.com, Novig, Underdog, and Robinhood. 

“Missourians voted for a safe, well‑regulated sports wagering market that supports public education and addresses problem gambling. Companies cannot repackage sports bets as ‘event contracts’ to avoid Missouri law. We will enforce the rules voters approved and protect consumers,” said Hanaway in the press release. “Any company that wants to offer sports wagering in Missouri must be licensed by the Missouri Gaming Commission, pay the required taxes and fees, and ensure no one under 21 can place a bet.”

Another state that has sent cease-and-desist notices to prediction market platforms was Tennessee. They sent them to Kalshi and Polymarket. 

Hanaway isn't looking to ban prediction market platforms, though. Instead, the angle seems more about paying the same tax that regulated sports betting operators pay. 

In Missouri, that rate is a flat 10%.

“I think it siphons a lot of money from a lot of the other sports betting sites that have to pay tax in Missouri,” she said. 

Missouri AG Raises Age and Tax Concerns

Another concern for Hanaway is the possibility of underage people trading.

“They don’t have any kind of age verification, so we are concerned that they have people playing who are not of age, and the fact that we have seen in some jurisdictions some sort of insider trading, where people have more knowledge of what the outcome might be,” Hanaway said.

Most prediction market platforms allow traders to sign up and buy and sell contracts at 18, which is three years younger than the legal sports betting age in Missouri. Right now, the only prediction market platform with a minimum age of 21 is Novig. 

Interestingly, Hanaway/Missouri was not part of the 44-state letter sent to the Commodity and Futures Trading Commission that argued the CFTC didn't have the authority to regulate sports predictions. 

“Chances are they may sue us once they get this cease-and-desist letter, because these companies argue that they are regulated at the federal level as a commodity, like the corn and bean futures or farmers’ trade, that they have the same regulatory entity, and we say not quite like that,” Hanaway said.