Missouri AG Orders Six Prediction Markets to Halt Sports Event Contracts

Missouri Attorney General Catherine Hanaway announced on September 18, 2026, that her office has issued cease-and-desist letters to six prediction market operators: Polymarket, Kalshi, Crypto.com, Novig, Underdog, and Robinhood. The letters concern sports “event contracts” offered to Missourians, which the office said amount to unlicensed sports wagering under Missouri law.

The Attorney General’s Office called on the six companies to comply with Missouri law without delay. Hanaway directed the operators to cease offering sports event contracts to Missourians unless and until they are licensed by the Missouri Gaming Commission, and the office said failure to comply will result in enforcement action by the State of Missouri.

“Missourians voted for a safe, well-regulated sports wagering market that supports public education and addresses problem gambling,” Hanaway said. “Companies cannot repackage sports bets as ‘event contracts’ to avoid Missouri law. We will enforce the rules voters approved and protect consumers.”

Hanaway said any company that wants to offer sports wagering in Missouri must hold a license from the Missouri Gaming Commission, pay the required taxes and fees, and ensure that no one under 21 can place a bet.

Missouri voters approved Amendment 2 in 2024 to legalize and regulate sports betting, placing oversight with the Missouri Gaming Commission, and the market launched on December 1, 2025. Wagering is permitted through licensed mobile and online platforms and in person at authorized locations, with a 10% tax on sports betting gross receipts.

That framework requires age verification so that no one under 21 can place a sports wager. The office said that Polymarket, Kalshi, Crypto.com, Underdog, and Robinhood either allow underage users to access their products or do not have adequate safeguards in place to prevent Missourians under 21 from participating in sports wagering.

The announcement also set out the office’s position on federal law. According to the office, federal courts have held that online sports wagering platforms of the kind these operators run fall under state gambling laws, and federal law does not preempt state law on the subject. Sports event contracts are not “swaps” governed by the federal Commodity Exchange Act, the office said, rejecting a position it described as frequently claimed by illegal online sportsbooks.

Kalshi Reaches Enforcement Standstill With Montana Officials

On September 17, 2026, KalshiEX LLC and Montana officials filed a joint stipulation of dismissal in the U.S. District Court for the District of Montana, voluntarily dismissing Kalshi’s lawsuit against Attorney General Austin Knudsen and other state defendants.

The action is dismissed with prejudice as to the five commission defendants — Tony Harbaugh, Jon Metropoulos, Steve Morris, Leo Prigge, and Janna Taylor — and without prejudice as to Knudsen, Alex Sterhan, and the Montana Gambling Control Division, meaning Kalshi could bring its claims against those defendants again. The parties will bear their own costs, expenses, and attorneys’ fees.

The stipulation states that under Montana law, the attorney general has authority to initiate or pursue any enforcement action against Kalshi, while the commission defendants only have statutory authority to report alleged violations to the attorney general, the legislative auditor, or another law enforcement authority. Kalshi’s agreement to dismiss the commission defendants with prejudice was made in reliance on that statutory authority and on a representation from defense counsel that the commission defendants have no independent enforcement authority.

Under the agreement, the defendants will not commence, pursue, or refer for prosecution any civil or criminal enforcement action, investigation, cease-and-desist proceeding, or other administrative action against Kalshi, its affiliates, or their officers, directors, employees, agents, or members over Kalshi’s role in transactions involving event contracts traded on a designated contract market. The standstill remains in place until the later of a denial of Kalshi’s request for further review or the issuance of an en banc decision.

If a non-commission defendant seeks to begin an enforcement action after that point, it must first give Kalshi 30 days’ written notice. The stipulation was reached in connection with Kalshi’s September 9, 2026, petition for rehearing and rehearing en banc of the Ninth Circuit’s August 28, 2026, panel opinion in KalshiEX LLC v. Assad.

CFTC Staff Grants Registration Relief to Passive Software Providers

The Commodity Futures Trading Commission’s Market Participants Division announced on September 17 that it has issued a no-action position for providers of passive software. Subject to certain specified conditions, the division will not recommend that the commission take enforcement action against any such provider or its relevant personnel for failure to register as an introducing broker or as an associated person of an introducing broker.

The division said the position is similar to the one provided in Staff Letter 26-09 and is now broadly available to such providers. It applies solely to the provision and marketing of software that facilitates trading by a provider’s users with registered futures commission merchants, introducing brokers, and designated contract markets.