Robinhood and Polymarket US sue Missouri over sports event contracts

Robinhood Derivatives and Polymarket US filed separate federal lawsuits on 9 November seeking to block Missouri from enforcing its sports wagering laws against their event-contract businesses. The two complaints, filed in the Eastern District of Missouri, bring the number of legal challenges to six, one from each business named in the state’s September cease-and-desist announcement or its relevant operating entity.

Missouri Attorney General Catherine Hanaway says the contracts amount to unlicensed sports wagering. Both companies argue that the federal Commodity Exchange Act pre-empts Missouri’s enforcement.

Robinhood’s challenge puts brokers in focus

In its complaint, Robinhood Derivatives says it acts as a registered futures commission merchant and facilitates trades on exchanges including Kalshi, Rothera and Nadex. It argues that federal law also protects brokers that route customer orders to those exchanges. The company says Missouri’s solicitor general told it on 6 November that the state intended to seek a court order compelling compliance. Robinhood asks for a temporary restraining order and preliminary and permanent injunctions.

QCX LLC, the exchange that does business as Polymarket US, asks for preliminary and permanent injunctions in its separate complaint. QCX also argues that Missouri’s licensing rules discriminate against out-of-state businesses in violation of the US Constitution’s Commerce Clause. Prediction Frontier has verified the two complaints. Any order granting relief in the new cases remains unverified.

Missouri seeks restrictions on Novig payments

Missouri’s 9 November answer and counterclaims ask for temporary, preliminary and permanent relief under the federal Unlawful Internet Gambling Enforcement Act. The requested order would restrict Ludlow Exchange’s acceptance of financial instruments from Missouri residents in connection with alleged unlawful internet gambling.

The state also seeks restitution and civil penalties of up to $1,000 per violation under Missouri consumer law, and an injunction and abatement under a public-nuisance claim. These are allegations and requested remedies. The filing does not itself impose payment restrictions, award penalties or shut down the exchange.

How the other Missouri cases fit

Ludlow filed a preliminary-injunction motion and supporting memorandum on 8 November. In a separate Eastern District case, KalshiEX sued Missouri officials on 27 October and filed a motion for a temporary restraining order and preliminary injunction on 6 November. Missouri defendants asked the court on 5 November to consolidate the Ludlow and Kalshi cases.

In the Western District, the court’s public filing feed listed a preliminary-injunction motion in Underdog Exchange DCM’s new case on the evening of 8 November, local time. Minutes later it listed a similar motion in the separate case that North American Derivatives Exchange, which does business as OG.com Prediction Markets, filed on 16 October.