Missouri Attorney General Catherine Hanaway sent cease-and-desist letters on September 18, 2026, to six prediction-market operators, ordering them to stop offering sports event contracts to Missourians. The recipients are Kalshi, Polymarket, Crypto.com, Novig, Robinhood, and Underdog. Each has 30 days to comply. The details here come from the attorney general's office and reporting by Missouri outlets including KCTV5, ABC17, and KY3.
Hanaway's argument is that these contracts are sports bets by another name, and that taking them without a Missouri license is illegal. Companies, she said, cannot "repackage sports bets as 'event contracts' to avoid Missouri law." What makes the Missouri case distinct from the prediction-market fights in other states is timing: Missouri voters approved Amendment 2 in November 2024, and the regulated market it created only went live on December 1, 2025. So the state is not defending an old prohibition; it is defending a market its own voters just built.
What the state is claiming
The letters lean on the framework Amendment 2 established. Legal sports wagering in Missouri runs through the Missouri Gaming Commission, carries a 10% tax on operators' gross receipts, and requires that bettors be 21 or older with proper age verification. Hanaway's office contends the event-contract platforms sidestep all of it: no state license, no tax, and, in the office's telling, weaker safeguards that can let people under 21 trade on game outcomes. That consumer-protection angle, especially around younger users, featured heavily in the state's messaging, with local coverage pairing the announcement with warnings from gambling-addiction specialists.
Underdog is on the list
One name on the list is worth flagging directly for readers of this site: Underdog, which we cover as a daily fantasy operator, is among the six. The letter concerns Underdog's prediction-market product, the sports event contracts it began offering in 2025, and not its daily fantasy contests, which operate under a separate legal framework. We think it is worth being upfront about that, because Underdog is a partner we work with on the fantasy side, and we cover regulatory actions the same way whether or not a company is one we have a relationship with. The cease-and-desist is a state enforcement step, not a court ruling, and Underdog and the other operators have not yet said how they will respond.
Part of a widening fight
Missouri is not acting in isolation. The question of whether a Kalshi or Polymarket sports contract is a federally regulated financial product or an illegal bet is now working through multiple courts, with a Ninth Circuit ruling against Kalshi in August, a conflicting Third Circuit ruling in the industry's favor, and New Jersey asking the Supreme Court to settle it. Other states have gone to court directly: New York's attorney general sued Kalshi in August seeking at least $36 billion, and Baltimore sued Kalshi and Polymarket earlier in the year. The CFTC, for its part, has countersued several states, arguing their enforcement is preempted by federal commodities law. A cease-and-desist from Missouri does not resolve any of that, but it adds a well-timed, voter-backed test case to the pile.
Our take
The Missouri letters are a smaller legal instrument than a lawsuit, but the framing is the strongest we have seen from a state. It is hard to argue that prediction markets fill a gap where no legal option exists when the state has a licensed, taxed, voter-approved sportsbook market that opened less than a year ago. That is exactly the setting regulators have wanted for this fight. For Missouri bettors, nothing changes immediately: the licensed sportsbooks remain open and legal, and the event-contract platforms may keep operating while they weigh a response or a challenge. We will update our Missouri guide as the operators reply and if any market actually pulls its sports contracts from the state. As always, we cover prediction markets as what they are, a fast-growing product on unsettled legal ground, and not as a substitute for a licensed sportsbook.