Missouri AG orders Kalshi, Polymarket to stop operating prediction markets here

Hannah Wyman, St. Louis Post-Dispatch on Sep 20, 2026

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The Missouri Attorney General’s office is cracking down on prediction markets that compete with the state’s licensed sports betting operators — and don't pay state taxes on the bets.

Attorney General Catherine Hanaway’s office announced Friday that it has sent cease-and-desist letters to companies like Polymarket, Kalshi and Robinhood, which offer sports “event contracts” to Missouri bettors.

Online prediction markets allow users to bet on the outcome of future events, from things like who will win a presidential election to the daily high temperature in a city. Unlike casinos, where player bet against “the house,” players in prediction markets bet against each other.

Hanaway argues that facilitating “event contracts” constitutes unlicensed sports wagering. By operating without a license, Hanaway says prediction markets are able to avoid paying the state’s 10% wagering tax and don’t ensure that users are over 21 years old.

Missouri voters approved legal sports betting on Nov. 5 two years ago, 50.1% to 49.9%. The amendment states that a portion of the tax revenue collected will go to public education across the state.

Online and in-person betting launched on Dec. 1, 2025. Since then, Missourians have wagered about $2 billion.

Between Dec. 1, 2025, and the end of July 2026, Missouri collected about $11.77 million in taxes. The state projects that it will reach more than $25 million by the end of November.

Hanaway, in her cease-and-desist letters, said the prediction market operators are essentially repackaging sports betting to avoid Missouri Law.

“We will enforce the rules voters approved and protect consumers,” Hanaway said in a statement. “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.”

The letters have been sent to Polymarket, Kalshi, Crypto.com, Novig, Underdog and Robinhood.

Missouri joins about 40 other states that are attempting to control prediction markets at the state level. Earlier this month, Washington, D.C., publication The Hill reported that the issue of who should regulate prediction markets will likely head to the Supreme Court as circuit court decisions were split.

In April, the 3rd U.S. Circuit Court of Appeals, in Philadelphia, sided with Kalshi, agreeing that contacts are considered federal swaps. But in August, the 9th Circuit ruled in Nevada’s favor, finding that states can regulate betting because the contracts are sports bets.

Hanaway, in her press release, appears to side with the 9th Circuit, saying federal courts have ruled that online sports wagering platforms are subject to state gambling laws, and federal law does not preempt state law in this area.

Sports “event contracts,” the news release continues, do not qualify as “swaps” governed by the federal Commodity Exchange Act.

“Missouri expects all online sports wagering platforms to comply with Missouri’s sports betting laws, and Kalshi is no exception,” reads Hanaway’s letter to New York-based prediction market platform Kalshi. “While Missouri remains open to possible legislative reforms in the future, the only immediate solutions available to Kalshi are to bring its operations into compliance with Missouri law or to stop offering its online sports wagering platform to individuals located in the State of Missouri.”

Polymarket, Kalshi, Crypto.com, Novig, Underdog and Robinhood did not immediately respond to a request for comment.