Kalshi Sues Missouri Over Sports Contracts

Kalshi has sued Missouri in federal court to stop the state from enforcing its gambling laws against the exchange’s sports event contracts. The complaint, filed Tuesday, October 27, in the US District Court for the Eastern District of Missouri, names Attorney General Catherine Hanaway, the Missouri Gaming Commission, executive director Michael A. Leara, the commission’s chairman and four commissioners.

The suit answers a cease-and-desist letter Hanaway sent on September 16. Kalshi argues that the federal Commodity Exchange Act gives the CFTC “exclusive jurisdiction” over contracts traded on a federally designated exchange, so the Supremacy Clause keeps Missouri’s sports betting rules away from them. It wants a temporary restraining order, a preliminary injunction and a permanent injunction.

Kalshi’s legal cause of action rests on the Supremacy Clause of the U.S. Constitution (Art. VI, cl. 2) and Section 2(a)(1)(A) of the Commodity Exchange Act (CEA) (7 U.S.C. § 2(a)(1)(A)). Under federal law, the Commodity Futures Trading Commission (CFTC) maintains exclusive jurisdiction over agreements, contracts, and transactions involving swaps and retail event derivatives traded on a federally registered Designated Contract Market (DCM).

Two Options, Neither of Them Workable

The cease-and-desist letter gave Kalshi two choices. It could stop, or it could get a license from the Missouri Gaming Commission, pay all associated state taxes and fees, and stop taking sports trades from anyone in Missouri under 21. Missouri charges a 10% wagering tax on adjusted gross revenue, and the letter says the license and renewal fees “could be as much as $500,000” each.

The age rule goes straight at Kalshi’s own terms. The letter points out that Kalshi’s member agreement lets anyone who has reached “the age of majority” in their home state trade, and in Missouri that age is 18.

The letter asked for confirmation within thirty days, which put the deadline at October 16. According to the complaint, the Attorney General’s Office gave Kalshi a two-week extension to October 30. Then, on October 27, Missouri’s Solicitor General told Kalshi that the state “could not agree to withhold enforcement.” Kalshi filed the same day.

Why Kalshi Says No License Exists for It

The core of the complaint is that the license route is closed. Missouri issues retail and mobile sports wagering licenses, and most of them can only go to casino license holders, professional sports teams or operators working on their behalf. Kalshi is none of those.

That leaves two direct mobile licenses for operators without those ties. The complaint says the commission picked DraftKings and Circa Sports for both in August 2025 and licensed them on April 29, 2026, so nothing is left.

The Rules It Says It Can’t Follow

Even with a license, Kalshi argues, it would clash with federal rules. Missouri licensees may only take wagers on events in a commission-approved catalog and can’t accept wagers from a corporation or any other entity that isn’t an individual. Federal law lets an exchange self-certify its contracts and trade with businesses.

Pulling out of Missouri isn’t clean either, the company says, because CFTC rules require an exchange to give “impartial access” to its markets. And ignoring the state carries real risk. The complaint points to a Class E felony for promoting gambling in the first degree, plus administrative fines of $50,000 per violation, or $100,000 for violations arising from the same occurrence.

Missouri Calls It Sports Betting by Another Name

Hanaway’s office isn’t moving. When she sent letters to six prediction markets in September, including Polymarket, Crypto.com and Robinhood, she said that “companies cannot repackage sports bets as ‘event contracts’ to avoid Missouri law.” Missouri voters approved Amendment 2 in 2024, and the regulated market launched on December 1, 2025, according to her announcement.

After Kalshi filed, the Attorney General’s Office told Courthouse News Service that Hanaway “will enforce the law, and we are confident the federal courts will not prevent her from doing so.” Hanaway has also signed an amicus brief asking the US Supreme Court to review the Third Circuit decision that went Kalshi’s way in New Jersey, the complaint says.

Crypto.com’s Exchange Sued First

Kalshi isn’t alone in court. North American Derivatives Exchange, the exchange behind Crypto.com’s OG prediction market, filed its own complaint against Hanaway and the commission in the Western District of Missouri on October 16.

Courts Still Split on the Core Question

Kalshi is walking into divided case law. Its complaint cites the Third Circuit, preliminary injunctions won in Arizona and Minnesota, and an Illinois injunction granted earlier this month.

The other side has wins too. On September 25 the Sixth Circuit held that Kalshi’s contracts are not swaps and that federal law does not preempt Ohio or Tennessee gambling laws. The Ninth Circuit agreed in August that federal law preempts state rules for swaps traded on an exchange, but found Kalshi’s sports contracts likely aren’t swaps. Hanaway’s letter puts Missouri with what it calls “the majority of federal courts.”

The CFTC has sued ten states over attempts to apply their gambling laws to federally regulated exchanges, according to the complaint. Missouri isn’t on that list.