Underdog Sues Tennessee Over Prediction Markets
Alex Harper • Oct 19, 2026 Below, Casino US covers the lawsuit, how prediction markets work and the rulings that matter next.
Why Novig Sues Missouri
The fight moved from a warning letter to court in a month.
In September, Catherine Hanaway, Missouri’s attorney general, told six prediction market firms to pull their sports contracts. Each had until October 17 to secure a state license and accept Missouri’s 10% betting tax, or leave.
Instead of complying, Novig took Hanaway and two state gaming regulators to federal court in St. Louis. Crypto.com brought a similar case across the state that same Friday. Counting Missouri, Novig has now sued six states since August, including New York, Washington and Massachusetts.
State Law vs Federal Law: The Core Argument
The case turns on one question: who regulates sports event contracts?
Novig started as a betting exchange, tried sweepstakes, then made its prediction market debut in August. In June, the CFTC, the nation’s futures and commodities regulator, signed off on it as a federal exchange. Novig says that approval puts its sports markets beyond Missouri’s reach.
In contrast, Hanaway’s office says a bet on a game counts as sports betting on any platform. Also, Missouri’s licensed books have handled roughly $2 billion since their December 2025 launch.
However, the courts haven’t settled the issue. Earlier in 2026, the 3rd Circuit ruled for Kalshi, but the 6th Circuit backed state regulators. As a result, how US gambling laws treat event contracts depends partly on which appeals court covers a state.
Missouri sits in the 8th Circuit, the federal appeals court now hearing an Iowa case on the same issue.
Prediction Markets vs Licensed Missouri Sportsbooks
The two look similar on screen but work differently.
Prediction market users trade contracts that pay $1 if an outcome happens and $0 if it doesn’t. Bettors familiar with reading sports betting odds can treat a 60-cent price as a 60% chance.
| Feature | Licensed Sportsbook | Prediction Market |
| Regulator | Missouri Gaming Commission | CFTC (federal) |
| Who you bet against | The sportsbook | Other users |
| Minimum age | 21 | 21 at Novig, 18 elsewhere |
| Missouri tax | 10% of gross receipts | None paid to Missouri |
| Missouri license | Required; fees reach $500,000 | None held |
Notably, age checks are central to the state’s case. Hanaway claims five of those six operators can’t reliably keep out users younger than 21. That matters because the legal gambling age for Missouri sportsbooks is 21, the same floor Novig sets.
Where the Sydney Sweeney Ads Fit In
While Novig sues Missouri in court, its marketing draws just as much attention.
Actress Sydney Sweeney took an equity stake in Novig in September and fronts its ads. However, her first spot drew criticism from female athletes. Even so, Novig released a second Sweeney ad on October 10.
According to AdAge, Novig reports a 361.8% jump in first-time depositors after the debut ad. Casino US hasn’t checked that number on its own.
Novig Sues Missouri: What Bettors Should Watch Next
Nothing changes overnight, but three things will shape what Missourians can use:
- Whether a St. Louis federal judge blocks Missouri’s enforcement against Novig
- How the 8th Circuit rules in the Iowa case
- Whether Hanaway acts now that the October 17 deadline has passed
If you bet in Missouri, licensed sportsbooks answer to a state regulator when disputes come up. Before trying a prediction market, compare it with licensed sports betting sites on age checks, payouts and complaint handling. Whichever you pick, set deposit limits with responsible gambling tools.
The Bottom Line
As Novig sues Missouri, it’s betting that federal courts will back the CFTC over the state. Until a judge or the 8th Circuit rules, prediction markets in Missouri stay in a legal gray zone.
