Missouri AG Targets Prediction Markets Over Illegal Sports Betting Allegations

The regulatory landscape for digital betting in the United States is facing a major shakeup as Missouri's top law enforcement official moves against prediction markets. Attorney General Catherine Hanaway has officially sent cease-and-desist letters to six prominent firms: Polymarket, Kalshi, Crypto.com, Novig, Underdog, and Robinhood. The central allegation is that these companies are operating unlicensed sports betting by packaging wagers as financial "event contracts." This move comes at a time when Missouri has already established a regulated sports betting market, which was approved by voters via Amendment 2 in 2024 and launched on December 1, 2025.

One of the primary concerns raised by state officials is the protection of minors. Hanaway highlighted that these platforms often lack sufficient safeguards to prevent individuals under the age of 21 from participating. Addiction specialists, including Taylor Brown from Midwest Recovery Centers, point out that the high accessibility of these apps on smartphones creates a constant dopamine flow, making them particularly addictive for vulnerable young populations. The state demands that these firms immediately halt operations in Missouri unless they obtain a license from the Missouri Gaming Commission.

Numbers and facts

Financial stakes are high in this regulatory tug-of-war. Licensed sports betting operators in Missouri are subject to a 10% tax on gross receipts. Since the market's inception in December 2025, the state has already collected $11.8 million in taxes intended for public education and gambling addiction services. Prediction markets currently avoid these payments by classifying their activities as financial trading rather than gambling.

"Missourians voted for a safe, well regulated sports wagering market that supports public education and addresses problem gambling. Companies cannot repackage sports bets as 'event contracts' to avoid Missouri law. We will enforce the rules voters approved and protect consumers." - Catherine Hanaway, Missouri Attorney General

While the state asserts its authority, the companies argue they are already compliant with federal law. A spokesperson for Robinhood stated that their event contracts are regulated by the Commodity Futures Trading Commission (CFTC) through their registered entity, Robinhood Derivatives, LLC. Polymarket issued a similar statement, maintaining that a federal framework should take precedence over a "patchwork of state rules."

Why it matters for German players

The situation in Missouri mirrors global trends in gambling regulation, including in Germany. The German Interstate Treaty on Gambling 2021 (GlüStV 2021) establishes strict rules for transparency and player safety. German players should be aware that platforms offering betting-like products without a GGL license are considered illegal and do not offer the protections required by German law, such as the LUGAS deposit monitoring system or the OASIS self-exclusion database.

In the US, several other states have already taken action against similar platforms. Michigan secured a preliminary injunction against Kalshi, and a federal court recently ruled in favor of California tribes in a lawsuit against the same company. These developments suggest that the era of unregulated prediction markets acting as a workaround for sports betting laws may be coming to an end.

What it means for GGL-licensed casinos

For operators holding a GGL license, the Missouri case serves as a reminder of the importance of clear product categorization. Hybrid products that blur the line between financial markets and gambling will likely face increased scrutiny from the Gemeinsame Glücksspielbehörde der Länder. Licensed casinos in Germany must continue to prioritize age verification and adhere to the strict 1 Euro stake limit for virtual slots to remain compliant. The ongoing legal battles in the US will likely influence how European regulators view prediction markets and their impact on the broader gambling ecosystem.