KEY TAKEAWAYS
- Kalshi is the third prediction market operator to respond to a Missouri cease-and-desist notice by suing the state.
- The company says it cannot comply with the C&D’s direction to seek a wagering license because there is no avenue for it to do so.
- The Attorney General’s Office is confident of winning the fight in court, amid similar challenges from Crypto.com and Novig.
Kalshi joined fellow prediction market operators by suing Missouri this week, after Attorney General Catherine Hanaway issued cease-and-desist notices to six sports event contract platforms last month.
In a federal court lawsuit filed on Tuesday, Oct. 27, Kalshi argued that the Show-Me State’s attempt to ban it from operating in the state is a form of regulation that intrudes on what it maintains is its federal right to offer event contracts under the Commodity Exchange Act (CEA) and the oversight of the Commodity Futures Trading Commission (CFTC).
Kalshi wants the court to issue a temporary restraining order, preliminary injunction, and permanent injunction blocking Hanaway and the Missouri Gaming Commission (MGC) from pursuing further compliance and enforcement actions against the firm.
Missouri AG expected lawsuits after taking fight to prediction markets
Hanaway’s office announced on Sept. 16 that it issued cease-and-desist letters to six prediction market platforms that offer sports event contracts in the state:
- Crypto.com
- Kalshi
- Novig
- Polymarket
- Robinhood
- Underdog
The letters, which accused the sites of offering a product tantamount to illegal sports betting, ordered the companies to stop offering sports contracts to Missouri customers unless they obtained licenses from MGC.
The state opened its legal state-regulated sports betting market in December 2025, charging operators licensing fees, taxing them at 10% of adjusted gross revenue, and limiting wagering to customers aged 21 years old or older.
Hanaway told KFVS 12 in September that she realized the recipients of the letters might take Missouri to court, as has happened in numerous other states.
That proved prophetic, as Novig and Crypto.com each sued the state in federal court earlier in October in an attempt to halt the state’s enforcement efforts in their tracks.
Show-Me how we could get a Missouri license, says Kalshi
Kalshi’s new lawsuit echoes some of its competitors’ arguments, including that it cannot reasonably be expected to obtain a license.
“The letter gives Kalshi only two options: cease and desist, or obtain a Missouri Gaming Commission license, pay all associated state taxes and fees, and stop serving Missourians under 21 years of age,” states the court complaint. Kalshi said that it cannot comply with either option and so it had no choice but to take legal action.
“Ceasing operations would place Kalshi in tension with, and could jeopardize its compliance with, the CFTC’s impartial access requirement … ceasing to offer sports event contracts in Missouri, would bring Kalshi out of compliance with federal law,” counsel for Kalshi wrote.
On the flip side, Kalshi said that it cannot comply with Missouri’s directive to obtain a state betting license either, because “no license is realistically available to Kalshi.” Both of Missouri’s two untethered mobile wagering licenses are already taken (by DraftKings and Circa Sports), and Kalshi stated that it does not qualify for a tethered license, which would require it to partner with an in-state casino or professional sports team.
“Even if Kalshi could obtain a license, which it cannot under Missouri’s own regime, it could not operate within that regime without jeopardizing its federal designation,” the complaint added. “Missouri law requires licensed operators to comply with a host of state-specific restrictions that cannot be reconciled with the CEA.”
Kalshi claims Missouri went back on extension promise
Kalshi also accused state officials of going back on a pledge not to pursue enforcement until after Oct. 30.
The lawsuit states that Hanaway’s office initially demanded confirmation of compliance or cessation by Oct. 16, but gave the company a two-week extension until Oct. 30.
“But, on October 27, 2026, the Solicitor General of Missouri told Kalshi that it could not agree to withhold enforcement against Kalshi, placing Kalshi at imminent risk that Missouri would pursue an enforcement action against it,” said the firm.
Missouri AG confident of court win
SBC Americas reached out to AG Hanaway’s office and the MGC for comment.
“If you are going to bet on the Chiefs beating the Broncos, the rules should be the same regardless of whether the bet is placed through an online prediction market or at the casino,’ said a spokesperson for the Attorney General. “In both situations, it’s sports betting—and Missourians voted to subject sports betting to licensing and taxation rules.
“Attorney General Hanaway will enforce the law, and we are confident the federal courts will not prevent her from doing so.”
