Novig and Crypto.com exchange ask federal courts to block Missouri actions

Novig —operating as Ludlow Exchange— and North American Derivatives Exchange, Crypto.com’s derivatives exchange, filed federal lawsuits on Friday 16 October to stop Missouri from treating their event contracts on sports as unlicensed betting. Ludlow Exchange filed a 42‑page complaint in the Eastern District of Missouri naming Attorney General Catherine Hanaway, Missouri Gaming Commission CEO Michael A. Leara and Chair Jan Zimmerman; North American Derivatives Exchange filed a 39‑page suit in the Western District of Missouri naming Hanaway and commission members.

Origin: September cease‑and‑desist letters

In September Attorney General Hanaway’s office sent cease‑and‑desist letters to Robinhood, Underdog, Novig, Crypto.com, Kalshi and Polymarket, ordering them to stop offering event contracts on sports to Missouri residents unless they obtain a license from the Missouri Gaming Commission. Licensed bookmakers in the state pay a 10% tax on gross receipts and must exclude anyone under 21 years of age. Hanaway wrote on X on 18 September: “Companies cannot repackage sports bets as ‘event contracts’ to evade Missouri law.” According to Novig’s complaint, the letter gave it until 17 October to comply; as of Monday close no enforcement action had been announced against either exchange.

Argument of federal preemption

Novig argues that the Commodity Exchange Act gives the Commodity Futures Trading Commission exclusive jurisdiction over swaps traded on a federally designated contract market, and that its event contracts are swaps. The complaint notes that the CFTC designated Novig as such a market in June. Novig seeks a declaration that Missouri’s gaming laws are preempted as applied to its exchange, together with preliminary and permanent injunctive relief; the early injunction request seeks to “preserve the parties’ legal positions pending resolution of a question on which courts are divided.”

North American Derivatives Exchange raises the same constitutional argument in its suit, asserting that Congress conferred “exclusive” jurisdiction on the CFTC over federally designated contract markets. A footnote says the attorney general’s office misdirected the cease‑and‑desist to Foris DAX, Inc., which the document identified as Crypto.com, instead of to North American Derivatives Exchange.

Procedural context

The filings cite the pending Kalshi appeal in KalshiEX v. Bird before the Eighth Circuit Court of Appeals, which includes Missouri; the briefing schedule is set to conclude on 6 December. Federal court dockets in Missouri showed no filings by Kalshi, Polymarket, Robinhood or Underdog as of Monday close.