Novig and OG.com Prediction Markets sue Missouri officials over sports event contracts

Two prediction-market companies — Ludlow Exchange LLC, which does business as Novig, and North American Derivatives Exchange Inc., which does business as OG.com Prediction Markets — sued Missouri’s attorney general and state gaming officials in separate federal courts on October 16, 2026, each seeking declaratory and injunctive relief.

Ludlow Exchange LLC, which operates as Novig, filed its complaint in the U.S. District Court for the Eastern District of Missouri, case 4:26-cv-1780, against Attorney General Catherine L. Hanaway, Missouri Gaming Commission Executive Director Michael A. Lear and commission Chair Jan M. Zimmerman, each in an official capacity.

North American Derivatives Exchange filed in the U.S. District Court for the Western District of Missouri, case 4:26-cv-00969, where its complaint names Hanaway and Gaming Commission officials Michael A. Leara, Jan M. Zimmerman, Kevin M. Spaulding, Kevin Cantwell, Sam Gladney and Roger Stottlemyre as defendants.

The docket lists Judge Greg Kays as presiding and the cause of action as 28 U.S.C. § 2201, the declaratory judgment statute.

The cease-and-desist letters

The suits follow Hanaway’s announcement, in a September 17, 2026, statement, that her office had sent cease-and-desist letters to six prediction market operators: Polymarket, Kalshi, Crypto.com, Novig, Underdog and Robinhood.

The attorney general’s office said offering sports event contracts to Missourians is unlicensed sports wagering under Missouri law.

Novig’s letter, dated September 17, gave the company 30 days, until October 17, 2026, to stop offering sports event contracts to Missouri residents or obtain a Missouri Gaming Commission license, warning that the state would otherwise pursue enforcement action.

“Companies cannot repackage sports bets as ‘event contracts’ to avoid Missouri law,” Hanaway said.

She said any company offering sports wagering in the state must hold a Gaming Commission license, pay the required taxes and fees and block anyone under 21 from betting.

Her office’s position is that federal law does not preempt state gambling law in this area and that sports event contracts are not swaps under the federal Commodity Exchange Act.

Missouri voters approved Amendment 2 in 2024 to legalize and regulate sports betting under the Gaming Commission, and the market launched December 1, 2025, with a 10% tax on gross receipts from sports betting, according to the release.

The release said Polymarket, Kalshi, Crypto.com, Underdog and Robinhood either let underage users onto their products or lack sufficient safeguards to keep Missourians under 21 from sports wagering.

Novig’s preemption argument

Novig’s complaint argues that the event contracts it lists are swaps under the Commodity Exchange Act traded on a CFTC-designated contract market, placing them under the CFTC’s exclusive jurisdiction and preempting Missouri’s gambling laws as applied to the company.

The CFTC designated Novig as a designated contract market on June 16, 2026, after the company applied on December 16, 2025, according to the complaint, which says Novig offers event contracts to customers in Missouri.

The filing contends Missouri’s licensing framework is structurally incompatible with an exchange: a license would oblige Novig to restrict participation to Missouri residents, which the company says would fragment the national liquidity an exchange needs, since an event contract executes only when a buyer and seller match at the same price.

If Novig keeps serving Missouri users, the complaint says, the defendants may bring an enforcement action potentially exposing it to criminal liability under Chapter 572 of the Missouri Revised Statutes, civil penalties under the state’s Merchandising Practices Act and abatement remedies, exposure the company calls irreparable harm.

Novig asks the court for a preliminary and permanent injunction barring the defendants from enforcing against it Mo. Const. art. III, § 39(g), the Gaming Commission’s implementing regulations and statutes that would subject it to criminal liability or abatement, plus declaratory relief.

The complaint points to recent decisions it says support preemption, including the Third Circuit’s 2026 ruling in KalshiEX LLC v. Flaherty, which held that the Commodity Exchange Act gives the CFTC exclusive jurisdiction over swaps traded on a designated contract market, a category the court said includes Kalshi’s sports-related event contracts.

It also notes that the CFTC published a proposed rule on October 9, 2026, that would define the term swap to include event contracts based on sports, politics, cultural and weather events.

Our AI news desk researched and wrote this article, and software checked every factual sentence against the records it links to, following the WriterOps methodology. Report an error.