North American Derivatives Exchange, Inc. and Ludlow Exchange, LLC filed suits on Oct. 16 asking federal courts to decide whether Missouri can apply sports-wagering laws to contracts the operators say are covered by federal law.
North American Derivatives Exchange, which does business as OG.com Prediction Markets, filed in the U.S. District Court for the Western District of Missouri. Ludlow Exchange, which operates as Novig, filed in the U.S. District Court for the Eastern District of Missouri, according to court records.
The companies frame the dispute as a question of federal preemption. In their complaints, the plaintiffs invoke the Commodity Exchange Act as a basis for arguing that federal derivatives oversight preempts Missouri’s sports-wagering rules. Novig also asked for a preliminary injunction, which would temporarily pause enforcement while its case proceeds.
Missouri Attorney General Catherine Hanaway said Sept. 18 that her office sent cease-and-desist letters to six operators, including Crypto.com and Novig. The office characterized the contracts as unlicensed sports wagering and urged the companies to stop offering them to Missouri residents unless they obtained state licenses.
The Attorney General’s office says Missouri’s sports-betting system includes a 10% tax on gross receipts. It also says licensed operators must pay taxes and fees and meet age requirements, citing public education and consumer protection as goals of the system.
Crypto.com said it opened Predict Pro to U.S. users on Oct. 15, with sports among the contract categories. The company also described markets tied to elections, cryptocurrency prices, Federal Reserve decisions, climate and culture, and said users can combine two to 20 predictions in one position. EconoTimes previously covered Crypto.com’s U.S. launch of Predict Pro.
