Missouri’s counterclaim against Novig’s operator and a separate suit by Polymarket US’s operator put state sports-wagering rules in conflict with the firms’ claims of federal authority.
Attorney General Catherine Hanaway filed the counterclaim on Nov. 9 in the existing federal case involving Ludlow Exchange, LLC. QCX LLC, which operates Polymarket US, filed a separate suit against Hanaway and five members of the Missouri Gaming Commission that day.
The counterclaim cites the 2006 Unlawful Internet Gambling Enforcement Act. Missouri asks the court to stop Ludlow Exchange, LLC, from taking money from state residents for online gambling the state considers illegal. Missouri says bets made without the Gaming Commission’s approval violate state law.
QCX says the Commodity Exchange Act, a federal derivatives law, overrides Missouri’s sports-wagering rules for its exchange. It also accuses the state of structuring licenses to disadvantage businesses based elsewhere. QCX says only Missouri casino boats and sports teams can qualify for licenses, while wagering servers must be based in the state.
The cases put Missouri’s gambling laws and licensing rules against QCX’s claim that federal derivatives law governs its exchange. The dispute follows cease-and-desist letters Hanaway sent to six operators in September over what her office called unlicensed sports betting. The recipients included Polymarket, Kalshi, Novig, Crypto.com, Underdog and Robinhood.
Hanaway’s office has described Missouri’s broader sports-betting system as including a 10% tax on gross receipts, as well as taxes, fees and age requirements for licensed operators. The office has cited public education and consumer protection as goals of that system.
The new filings also follow separate Oct. 16 suits by Ludlow Exchange, LLC, and North American Derivatives Exchange, Inc.. In its case, Novig argued that the Commodity Futures Trading Commission (CFTC) has sole authority over event contracts listed on federally designated exchanges.
