JEFFERSON CITY, Mo. (KY3) – Missouri’s top cop is going after prediction markets.
Missouri Attorney General Catherine Hanaway has sent cease-and-desist letters to six prediction market companies, accusing them of operating illegal sports betting.
The letters went to Polymarket, Kalshi, Crypto.com, Novig, Underdog and Robinhood. Hanaway said the companies are facilitating sports “event contracts” that constitute unlicensed sports wagering under Missouri law.
An addiction expert says the way prediction markets are so readily available to young people is putting vulnerable Missourians at risk of gambling addiction.
Accusations from the attorney general
Hanaway said Missouri voters approved a regulated sports wagering market that supports public education and addresses problem gambling.
“Missourians voted for a safe, well‑regulated sports wagering market that supports public education and addresses problem gambling. 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 be licensed by the Missouri Gaming Commission, pay the required taxes and fees, and ensure no one under 21 can place a bet.”
Hanaway said federal courts have ruled that online sports wagering platforms, including those offered by prediction market operators, are subject to state gambling laws. She said federal law does not preempt state law in this area, and sports event contracts do not qualify as “swaps” governed by the federal Commodity Exchange Act.
In 2024, Missouri voters approved Amendment 2, legalizing and regulating sports betting under the oversight of the Missouri Gaming Commission. The market launched 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.
Missouri’s framework requires age verification to ensure no one under 21 can place a sports wager. Hanaway said Polymarket, Kalshi, Crypto.com, Underdog and Robinhood either permit underage users to access their products or lack adequate safeguards to prevent Missourians under 21 from participating in sports wagering.
Hanaway said the companies must comply with Missouri law without delay and cease offering sports event contracts to Missourians unless and until they are licensed by the Missouri Gaming Commission. She said failure to comply will result in enforcement action by the state.
Company response
A Robinhood spokesperson said its event contracts are federally regulated.
“As we’ve previously shared, Robinhood’s event contracts are federally regulated by the CFTC and offered through Robinhood Derivatives, LLC, a CFTC-registered entity, allowing retail customers to access prediction markets in a safe, compliant, and regulated manner,” the spokesperson said.
A Polymarket spokesperson gave a similar response.
“Polymarket US maintains that prediction markets are regulated by the Commodity Futures Trading Commission under a federal framework, not a patchwork of state rules,” the spokesperson said.
Other states have taken similar action. A federal court this week ruled in favor of California tribes in a lawsuit against Kalshi.
Addiction concerns
Taylor Brown, with Midwest Recovery Centers, said he sees people from all backgrounds struggle with gambling addiction, often through betting on their phones.
“People have access to this in their pocket, and it’s a pretty addictive thing to have access to. It’s a flood of dopamine,” Brown said.
Brown said young people are particularly vulnerable to these platforms.
“Particularly young people are extremely vulnerable to these platforms and to thinking that it’s normal,” Brown said.
Brown said these companies should comply with government regulations to demonstrate good intentions.
“We are the commodity. Our attention has become the service that they’re providing, and then they sell advertising to us to other people,” Brown said.
In the first eight months of legal sports betting, Missouri collected $11.8 million in taxes, according to the Missouri Gaming Commission. Prediction markets do not pay the state’s 10% sports betting tax.
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