Kalshi opens talks with Missouri after sports-contract cease-and-desist order

Kalshi has become the first of six prediction-market companies to respond to Missouri’s cease-and-desist campaign over sports-related event contracts. The attorney general’s office said it was in ongoing discussions with Kalshi.

The company has until Oct. 16 to confirm that it has complied with Missouri law or stopped sports-wagering activity in the state. The office has said it could take further investigative steps or bring a lawsuit after the response period, without setting a timetable.

As covered last month, Attorney General Catherine Hanaway ordered Kalshi, Robinhood, Polymarket, Novig, Underdog and Crypto.com to stop offering sports event contracts to Missourians unless they obtain state licences.

Missouri characterizes the contracts as unlicensed sports wagering, arguing that companies cannot relabel sports bets as event contracts to evade state law. Its Sept. 16 letter to Kalshi said online platforms on which residents wager on professional, collegiate and other competitive events must be licensed by the Missouri Gaming Commission.

Under the state framework approved by voters in 2024 and launched Dec. 1, 2025, licensed operators must bar customers under 21, pay a 10% tax on sports-betting revenue and meet other regulatory requirements. The state says Kalshi’s member agreement allows participation by adults of the age of majority, which is 18 in Missouri. Missouri also alleged that five of the six targeted companies, excluding Novig, either permit underage access or lack sufficient safeguards against it.

An initial online sports-wagering licence and its five-year renewal can each cost as much as $500,000. State taxes and fees support elementary, secondary and higher education, as well as the Compulsive Gaming Prevention Fund.

Kalshi and other prediction-market companies maintain that their products are federally regulated swaps, governed by the Commodity Exchange Act and Dodd-Frank rather than state gambling law. The Coalition of Prediction Markets says the Commodity Futures Trading Commission, rather than state gaming commissions, is the appropriate regulator because the markets operate across state lines.

Nicole Kagan, Kalshi’s head of research, compared the platform with agricultural exchanges used by farmers to hedge crop risks. She said Kalshi does not set prices or profit from customers’ losses, distinguishing its model from a sportsbook.

The legal position remains unsettled nationally. In April, the U.S. Court of Appeals for the Third Circuit held that the CFTC had exclusive jurisdiction over Kalshi’s sports-related contracts and that federal commodities law pre-empted New Jersey’s gambling restrictions in that case. The court found the contracts fit the statutory definition of swaps when traded on a CFTC-licensed designated contract market, although Judge Jane R. Roth dissented and concluded that state gambling laws were not pre-empted.

Missouri disputes Kalshi’s position that its contracts are federally regulated swaps beyond state gambling law, telling Kalshi that most federal courts have rejected its federal-pre-emption argument. Prediction-market participants have filed suits in 11 states challenging state enforcement under the Commodity Exchange Act, while courts have reached conflicting conclusions on whether the federal law displaces state gambling rules.