Six prediction-market operators have thirty days to either get a Missouri gaming licence or stop taking sports bets from people in the state, under cease-and-desist letters from Attorney General Catherine Hanaway’s office.
The letters, dated 16 September and announced on Friday the 18th, went to Polymarket, Kalshi, Crypto.com, Novig, Underdog and Robinhood. As reported by KCTV, each asks the company to confirm compliance within 30 days. Hanaway’s framing is that the state is not inventing a rule so much as applying one the voters wrote: “Companies cannot repackage sports bets as ’event contracts’ to avoid Missouri law.”
What Missouri says the operators skipped
Missouri legalised mobile sports betting in 2024 and opened the market on 1 December 2025. The framework the letters cite is specific. Licensed operators must hold a licence from the Missouri Gaming Commission, pay a 10% wagering tax on adjusted gross revenue, pay an initial licence fee and a renewal fee every five years — the letter says each “could be as much as $500,000” — and keep anyone under 21 off the app. Under the constitutional amendment, that money is appropriated to elementary, secondary and higher education in the state and to a Compulsive Gaming Prevention Fund “designed to mitigate the social ills associated with sports wagering.”
The state’s case is that Kalshi and the other five took bets from Missourians without doing any of the four. “Yet Kalshi has kept all of that money for itself and disregarded its obligation to pay a portion to the State for the benefit of Missourians,” the Kalshi letter reads.
That is the mechanism, and it is the same one every earlier state action has run on: the product is sold nationwide out of one federally registered exchange, while the licence, the tax, the age gate and the problem-gambling levy that apply to the competitor down the street are treated as optional.
The age-verification finding
The concrete allegation in the letters is worth separating from the legal argument, because it is the part that speaks to harm rather than jurisdiction.
Missouri regulations impose an “affirmative duty” on online sportsbooks to “actively prevent the placement of a wager by individuals under twenty-one (21) years of age.” The attorney general’s office says Kalshi’s member agreement instead lets anyone who has reached “the age of majority in [their] state of residence” trade — 18 in Missouri. The release extends the same claim to Polymarket, Crypto.com, Underdog and Robinhood: that they “either permit underage users to access their products or lack adequate safeguards to prevent Missourians under 21 from participating in sports wagering.”
A state gambling regulator’s responsible-gaming and exclusion tools exist because the evidence on age and harm points one way. Products that route around that gate keep the young-adult customer and give up nothing but the licence fee.
Hanaway made the same point about the money in an interview with KFVS 12: “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 also told the station her office is concerned about the absence of the safeguards licensed books must run — and about insider trading, the older worry about event markets that now attaches to sports.
Which courts the letters cite
The letters lean on case law. The Kalshi letter asserts that Missouri “shares the same view as the majority of federal courts” and lists seven decisions: the Ninth Circuit’s 28 August ruling in its Nevada case, a Sixth Circuit decision from 24 April, and district court rulings from Iowa, Connecticut, Utah, the Southern District of New York and Maryland. The argument is that event contracts are bets, not swaps, and that the Commodity Exchange Act does not preempt state gambling law.
Not on the list: the Third Circuit’s April decision, which held the opposite — that the contracts are swaps and that CFTC jurisdiction bars New Jersey from regulating them. That ruling is the reason two dozen state enforcement actions have been tied up in federal court, and it is now the subject of cert petitions at the Supreme Court from New Jersey, Robinhood and Crypto.com. A cease-and-desist letter is a party’s brief, not a finding, and the split it does not mention is the one that will decide whether any of this survives.
A separate July filing by 44 state attorneys general made the jurisdictional case to the CFTC directly, arguing the agency has no authority over sports event contracts. Missouri’s letters are the unilateral version of the same claim.
The industry’s answer
The operators’ response is jurisdictional. “Polymarket US maintains that prediction markets are regulated by the Commodity Futures Trading Commission under a federal framework, not a patchwork of state rules,” a Polymarket spokesperson told KCTV. A Robinhood spokesperson said its event contracts are “federally regulated by the CFTC and offered through Robinhood Derivatives, LLC, a CFTC-registered entity.”
That is the claim the courts are still working through. What Missouri has added is a deadline, and the state’s own expectation that it will be litigated: “Chances are they may sue us once they get this cease-and-desist letter,” Hanaway told KFVS 12.
Who bears the cost either way
If the letters are enforced, the licensed books get their tax base back and the state’s education and compulsive-gaming funds get the revenue the amendment assigned them. If they are not, the market keeps a nationwide sportsbook with no state licence, no 21-and-over gate, and no contribution to the treatment fund that the state’s own voters attached to the product.
The people on the other end of the app are the ones both outcomes are argued on behalf of. Taylor Brown, of Midwest Recovery Centers, told KCTV he sees people from all backgrounds struggling with the phones in their pockets — “a flood of dopamine” — and that young people are especially vulnerable “to thinking that it’s normal.”