Kalshi Files Suit Over Missouri Cease-and-Desist Order

Kalshi files suit in federal court

Lawyers representing Kalshi filed a 39-page lawsuit in federal court. The suit was filed in U.S. District Court for the Eastern District of Missouri Eastern Division. It names the state of Missouri and Attorney General Catherine Hanaway as defendants. The case was assigned to Judge Maria Lanahan. She served as Missouri’s deputy solicitor general from 2021 to 2025.

The arguments being put forth by Kalshi's legal team are the standard fare for these prediction market vs. state government lawsuits. It cites that the Commodity Exchange Act (CEA) grants "exclusive jurisdiction" to the Commodity Futures Trading Commission over swaps traded on DCMs like Kalshi.

“Missouri’s attempt to prohibit Kalshi from operating is a form of regulation that intrudes on the federal scheme," the filing reads. "The letter gives Kalshi only two options: cease-and-desist, or obtain a Missouri Gaming Commission license, pay all associated state taxes and fees, and stop serving Missourians under 21 years of age.”

Kalshi's lawyers also believe that under current Missouri sports betting regulations, the company couldn't qualify for a sports betting license without risking its status under current federal regulatory standards.

“Even if Kalshi could obtain a license, which it cannot under Missouri’s own regime, it could not operate within that regime without jeopardizing its federal designation, Kalshi counsel wrote in the lawsuit filing. "Missouri law requires licensed operators to comply with a host of state-specific restrictions that cannot be reconciled with the CEA.”

Was the Missouri cease-and-desist order a mistake?

Missouri AG Hanaway sent cease-and-desist letters to all prediction market apps that are offering sports-event contracts in the state. She feels that the prediction market sites are doing an end run around Missouri's sports betting laws. Hanaway is also concerned that prediction market sites allow players as young as 18. In sports betting, players must be 21 years of age or older.

However, prominent sports betting attorney Daniel Wallach believes that Hanaway's cease-and-desist orders may be a mistake. These orders might be opening up a Pandora's Box of legal scenarios for the state.

"C&D letters can backfire—inviting preemptive federal suits, shifting the fight to jurisdiction and preemption, and delaying enforcement," Wallach wrote on his X feed.

"State-court suit first = faster path to geofencing. Missouri is the latest cautionary example."

Other prediction market sites are also suing in Missouri

Crypto.com and Novig joined Kalshi's fight. Both of these prediction market sites have also filed federal lawsuits over Hanaway's cease-and-desist orders.

Filing of the Crypto.com lawsuit was taking place in the Western District of Missouri by North American Derivatives Exchange. That's the CFTC-registered exchange behind Crypto.com's OG prediction markets platform. The suit makes the same argument as the Kalshi filing. However, the suit is also noting the incorrect delivery of Hanaway's cease-and-desist order to Foris DAX, Inc.

Novig's lawyers filed their lawsuit in the Eastern District of Missouri. They are seeking a preliminary injunction to preserve the status quo while the 8th Circuit, which covers Missouri, hears an appeal on the matter.