Crypto.com and Novig Sue Missouri as Market Leaders Hold Back — Eighth Circuit Now in Play via Iowa
Crypto.com and Novig filed federal lawsuits on October 16 challenging Missouri's cease-and-desist orders, arguing their sports event contracts fall under exclusive CFTC jurisdiction. The suits came as Missouri's 30-day compliance window closed. Notably, the market leaders — Kalshi, Polymarket, Robinhood, and Underdog — have not sued; Missouri said it is in 'ongoing discussions' with Kalshi. The outcome is tied to the Eighth Circuit, which is now weighing the same preemption question in Kalshi's appeal of a preliminary injunction denial in Iowa — the fourth federal circuit to take up the prediction market question.
Crypto.com and Novig filed federal lawsuits against Missouri on October 16, 2026, the day Missouri's cease-and-desist compliance window began to close, challenging the orders that Attorney General Catherine Hanaway issued to six operators on September 18. The companies argue that their sports event contracts fall under the exclusive jurisdiction of the CFTC and cannot be regulated under state gambling law. Novig is seeking both preliminary and permanent injunctions to block Missouri's enforcement. Missouri's cease-and-desist letters had required each operator to obtain a Missouri Gaming Commission license and pay the state's 10% wagering tax, or stop offering sports contracts in the state. The two companies that sued are relatively small operators for whom the suit is a bet-the-product decision; the suits keep them in the Missouri market while the preemption question is litigated.
The more revealing fact is who did not sue. Kalshi, Polymarket, Robinhood, and Underdog — including the two market leaders — did not file litigation against Missouri. Missouri said in early October that it was in 'ongoing discussions' with Kalshi, with a spokesperson indicating that further investigative steps or a lawsuit could follow. The restraint by the market leaders is a notable contrast to their posture in other states, where they have aggressively counter-sued. One explanation is tactical: with the Eighth Circuit already set to rule on the same question in the Iowa case, the leaders may see little value in opening a separate Missouri front when the circuit-level ruling will govern Missouri regardless. Another is that the smaller operators, lacking the leaders' broader legal and political resources, cannot afford to simply wait out the appellate process and need an immediate injunction to keep operating. The split mirrors the pattern seen in Connecticut, where smaller operators withdrew while Kalshi and Polymarket held firm.
The Eighth Circuit is the critical forum. Kalshi sued Iowa seeking a preliminary injunction against state enforcement (KalshiEX LLC v. Bird, S.D. Iowa), and Judge Stephen H. Locher denied the injunction in September 2026, finding Kalshi unlikely to succeed on its preemption argument. Kalshi filed an interlocutory appeal to the Eighth Circuit, docketed as No. 26-2874, with its opening brief due November 6. The Eighth Circuit's eventual ruling will bind federal courts across the circuit, which includes Iowa, Missouri, and five other states — meaning the Iowa appeal will effectively decide the Missouri litigation as well. Novig's complaint explicitly references the pending Iowa appeal and asks the court to preserve the status quo while the Eighth Circuit considers the federal jurisdiction question. The Missouri cases and the Iowa appeal are now functionally linked.
The Iowa appeal makes the Eighth Circuit the fourth federal circuit to take up the prediction market preemption question, after the Third (which ruled for Kalshi), the Ninth, and the Sixth (both of which ruled against). If the Eighth Circuit rules against Kalshi, the circuit split would widen to 3-1, strengthening the case for Supreme Court review and further isolating the Third Circuit's pro-Kalshi position. If it rules for Kalshi, the split would even to 2-2, creating a more balanced conflict that still demands SCOTUS resolution but without a clear directional trend. Either way, the proliferation of circuit rulings reinforces what has become the central dynamic of the prediction market legal fight: the question is being litigated in parallel across the federal judiciary, the rulings are accumulating faster than any single case can resolve them, and only the Supreme Court can produce a binding national answer. The Eighth Circuit's ruling, expected in the coming months, is the next major milestone in that sequence, and it will determine the fate of the Missouri enforcement campaign regardless of which individual operators chose to sue.
Operators mentioned in this article
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