Missouri countersues Novig, seeking to cut off its payments from state residents
Missouri's attorney general filed counterclaims against Novig on November 9, asking a federal court to bar it from taking payments from Missouri users.
Missouri has turned Novig’s own lawsuit into an enforcement case. On November 9, 2026, the state filed an answer and counterclaims in the Eastern District of Missouri, with Attorney General Catherine Hanaway asking the court to stop Novig from accepting money from Missouri residents for its sports event contracts.
Novig’s exchange, Ludlow Exchange LLC, sued Missouri officials in October (No. 4:26-cv-1780), arguing that federal commodities law shields its contracts from state gambling rules. The state’s filing denies that claim and adds three counterclaims of its own.
Three claims against the exchange
The first relies on the federal Unlawful Internet Gambling Enforcement Act of 2006, which lets a state attorney general go to federal court to restrain “restricted transactions.” Missouri alleges that Novig’s sports contracts are wagers placed with an operator not licensed by the Missouri Gaming Commission, which would make them unlawful internet gambling under the act, and that Novig knowingly accepts credit, electronic fund transfers and other payments from Missouri residents in connection with them.
The second claim is under the Missouri Merchandising Practices Act. The state argues that selling unlicensed sports wagering to residents is an “unfair practice” that deprives consumers of the safeguards of the licensed market.
The third asks the court to declare Novig’s operation a public nuisance under Missouri common law, citing a 1937 state Supreme Court ruling on gambling operations.
What Missouri wants
The state asks the court to dismiss Novig’s complaint with prejudice and to issue a temporary restraining order and preliminary and permanent injunctions barring Novig from accepting financial instruments from Missouri residents in connection with what it calls unlawful internet gambling. Under the state consumer law it seeks restitution and civil penalties of up to $1,000 per violation, plus the costs of investigation and prosecution. All of these are requested remedies; as of November 10, no court has granted them.
The answer also raises defenses to Novig’s suit, among them that the claim is not ripe because no enforcement action has been filed in state court, that the Tax Injunction Act bars it, and that Novig has “unclean hands” because it never tried to obtain a Missouri license.
Why it matters for traders
The docket also shows a preliminary injunction motion filed November 8, and a November 5 request by the state to consolidate the case with Kalshi’s Missouri suit (No. 4:26-cv-01860). The counterclaims mean the court hearing Novig’s challenge will also weigh the state’s own enforcement demands, aimed at the payments Missouri users make to the exchange.
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