Missouri’s attempt to force Polymarket into its sports betting licensing system has landed the state in federal court.
Polymarket US, operated by QCX LLC, filed suit Nov. 9, nearly two months after Attorney General Catherine Hanaway ordered it to stop offering sports contracts to Missouri residents without a gambling license.
The 40-page complaint, brought in the Eastern District of Missouri, names Hanaway and five Missouri Gaming Commission officials.
Missouri has no business regulating its sports contracts, Polymarket argues. The company says the Commodity Futures Trading Commission (CFTC) alone has authority over its contracts. It also says Missouri’s licensing restrictions run afoul of the Constitution’s Commerce Clause.
In her Sept. 16 letter, Hanaway gave Polymarket 30 days to stop taking sports-related trades from Missouri residents. Alternatively, it could secure a state gambling license, pay the applicable taxes and fees and bar anyone under 21 from trading.
Polymarket tried to settle the matter with Hanaway’s office after receiving the September warning. The talks went nowhere.
In its complaint, the company argues that its federal exchange designation puts its contracts outside Missouri’s gambling laws. It also takes issue with the state’s licensing system, which largely reserves access to operators working with Missouri casinos or professional sports teams. Both available independent licenses have already been awarded.
State rules requiring wagering servers to remain in Missouri present another obstacle, Polymarket argues, alongside restrictions on interstate wagering.
The lawsuit seeks a declaratory judgment and preliminary and permanent injunctions preventing Missouri from enforcing its sports wagering laws against the exchange.
Missouri faces growing prediction markets litigation
Polymarket is far from alone in challenging Missouri’s crackdown. Crypto.com’s derivatives exchange, Novig, Kalshi and Underdog have also filed federal lawsuits challenging the state’s enforcement efforts. Robinhood brought a separate challenge Nov. 9.
That means all six companies Hanaway sent cease-and-desist letters to in September have now challenged the state in federal court. Missouri accused the operators of running sports betting businesses under the guise of federally regulated financial exchanges.
Missouri voters approved legal sports betting in November 2024. Licensed operators began taking wagers Dec. 1, 2025, with the state collecting a 10% tax on adjusted gross receipts.
Missouri also went on the offensive Nov. 9, filing counterclaims against Novig just a day after the exchange moved for a preliminary injunction against state enforcement. The state alleges violations of federal internet gambling law, Missouri’s consumer protection statute and public nuisance law. It is seeking its own preliminary and permanent injunctions, along with restitution and civil penalties.
Polymarket’s legal challenges are not limited to Missouri. The company also sued Arkansas officials Nov. 9, while Crypto.com’s OG.com exchange filed a separate Arkansas lawsuit the same day.
Both followed Arkansas Attorney General Tim Griffin’s Nov. 4 lawsuit against Kalshi, which accuses the exchange of operating an illegal gambling business.
Federal courts remain divided over state authority
The wider jurisdictional dispute now involves dozens of cases across the country, with courts reaching conflicting conclusions.
The Third Circuit backed Kalshi in its New Jersey dispute, while the Ninth Circuit ruled against it in Nevada. The Sixth Circuit has also rejected Kalshi’s federal preemption arguments.
Meanwhile, the CFTC has pursued its own litigation against a number of states, including Connecticut, Illinois, New York, Minnesota and New Mexico.
Polymarket’s complaint cites preliminary injunctions obtained in Minnesota and Illinois as support for federal authority.
It also points to the CFTC’s Nov. 5 interpretation opposing domestic geographic restrictions on otherwise eligible exchange customers. The regulator told exchanges to end restrictions that violate its impartial access rules within 30 days or explain why compliance is not feasible, potentially putting them at odds with existing court orders.
Missouri, however, maintains that sports event contracts constitute gambling, regardless of whether they trade through federally registered exchanges.
The competing positions likely leave federal courts — and possibly the Supreme Court — to determine whether exchange registration shields sports contracts from state gambling oversight.