Missouri AG Moves to Halt Kalshi, Polymarket as Montana Pauses Its Fight
Missouri's attorney general is preparing a cease-and-desist order against prediction markets, while Montana pauses enforcement pending a Ninth Circuit rehearing.
This article was produced with AI assistance and edited by the ON360 newsroom.
Missouri is preparing to become the latest U.S. state to move against prediction-market operators, with Attorney General Catherine Hanaway telling Heartland News her office is drafting a cease-and-desist action against companies offering sports event contracts in the state.
Hanaway argues that platforms such as Kalshi and Polymarket are running gambling operations under a different label. “The way that they take contracts, as what they would call them, I call them bets online on sporting events is just like how FanDuel and others do it,” she said, adding that differences in fee structure do not change the legal analysis under Missouri’s gambling statute.
Consumer protection and tax at the centre of the dispute
Beyond the legal classification, Hanaway raised concerns about age verification and possible insider trading on prediction-market platforms. Her stated goal is to bring the companies under Missouri’s gaming laws and require them to pay gambling taxes.
She said her office remains open to a settlement and pointed to Kentucky, which she said is close to an agreement after pursuing its own enforcement action earlier this year. If no deal is reached, Hanaway said Missouri will sue. She also acknowledged prediction-market operators could respond with their own federal court challenge, a pattern already seen in other states.
Montana steps back while Ninth Circuit review continues
While Missouri escalates, Montana has pulled back. Kalshi is dropping its lawsuit against the state after Montana agreed, in a joint stipulation filed September 17, not to pursue enforcement, investigations or cease-and-desist proceedings over Kalshi’s event contracts.
The pause holds until either the Ninth Circuit denies further review or issues an en banc decision. Montana must give Kalshi 30 days’ written notice before resuming any action once that window closes. The arrangement follows Kalshi’s September 9 petition seeking rehearing of the Ninth Circuit’s August 28 ruling in a consolidated Nevada case.
CFTC widens access rules for third-party platforms
Separately, the Commodity Futures Trading Commission has broadened its no-action position for software firms that give users access to event contracts. A September 17 letter extends relief previously granted to Phantom to a wider group of qualifying passive software providers.
Under the guidance, providers can let users view markets and route orders directly to designated contract markets without registering as introducing brokers. Limits still apply: users must remain direct customers of the registered entity, and providers cannot hold customer funds, issue buy or sell signals, or control order execution.
The Missouri and Montana developments add to a patchwork of state responses to prediction markets that has already produced litigation in Nevada, New Jersey and Connecticut. For Canadian regulators and operators watching from across the border, the split approach, aggressive enforcement in some states and negotiated pauses in others, illustrates how unsettled the legal status of sports event contracts remains south of the border.
Ontario’s regulated iGaming market operates under a licensing framework through iGaming Ontario and the AGCO, distinct from the federally supervised derivatives model U.S. prediction markets rely on. Players in Ontario using licensed sportsbooks and online casinos continue to have access to standard responsible-gambling tools, including deposit limits and self-exclusion, regardless of how the U.S. dispute over event contracts resolves.
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