Crypto.com and Novig sue Missouri over sports betting regulations

[Japinat]

Another instance where prediction markets and gambling are being linked, because just recently, Crypto.com and Novig filed lawsuits against Missouri regulators after receiving cease-and-desist orders over their sports prediction markets.

Missouri regulators argue that what these companies are offering is sports betting, therefore they should obtain gambling licenses, while these two companies insist that they are operating prediction markets that fall under federal regulation. Of course they have their legal arguments since Kalshi and Polymarket are doing something similar, but interestingly, I found out that these two platforms also received cease-and-desist orders from Missouri.

I wonder how this will end, because if these platforms are eventually required to obtain gambling licenses, wouldn't that make them practically the same as traditional sportsbooks?

What do you think?

[DanWalker]

I wonder how this will end, because if these platforms are eventually required to obtain gambling licenses, wouldn't that make them practically the same as traditional sportsbooks?

I completely agree with your last question. If these platform are ultimately required to obtain any gambling license, there will be absolutely no difference left between them and traditional sportsbook! Under guise of federal commodity regulation, they are essentially passing off ordinary gambling under different name to line their own pocket. Yet, while licensed sportsbook are required to comply with regulation such as paying 10% tax, enforcing strict age verification and implementing measure to prevent gambling addiction then these prediction market blatantly disregard such law.

[Odohu]

Another instance where prediction markets and gambling are being linked, because just recently, Crypto.com and Novig filed lawsuits against Missouri regulators after receiving cease-and-desist orders over their sports prediction markets.

This is an interesting development and I will be watching to see how this matter is resolved. Even though I'm not a barrister,  I'm of the opinion that Crypto.com and Novig will lose this case. They will have a hard time proving that prediction market is not the same thing as gambling because it fulfills all the aspect of gambling and therefore requires gambling license.

[Smartprofit]

I personally understand the position of Missouri regulators... The state has its own budget. Gambling is subject to a regional tax, which goes to that budget. 🙋

If Missouri regulators lose this dispute, they will lose more than just revenue for their regional budget. They will also have to contend with the fact that traditional bookmakers will be outraged at being taxed while betting platforms are not. Anything involving big money always sparks heated debate.

Betting platforms also have understandable financial interests and compelling arguments in this dispute.

In a traditional online casino, players typically bet against the bookmaker. In betting markets, players typically bet against each other, and the bookmaker receives a commission for facilitating the game. These are not the same thing.

Crypto.com and Novig will likely use the same logical arguments as Kalshi in its dispute with the CFTC.  However, as far as I remember, that dispute concerned betting on political events, not sports. Overall, one thing can be said with certainty: legislation changes much more slowly than the entertainment industry. The prediction market is a completely new social phenomenon, and it must be acknowledged that the methods for its legislative regulation remain completely unclear.💁

[Iranus]

How platforms like Crypto.com and Novig are generating massive multi billion dollar trading volume. Yet they are unwilling to comply with local licensing law and age limit of 2. In my opinion, that is nothing but outright dishonest. Sooner or later someone or other would have taken stern action against them. Lawsuit has been filed against Crypto.com and Novig in Missouri court. But in this battle between federal and state regulation it seems unlikely that smile on their faces will last. If they end up having to obtain gambling license then their entire business model will collapse.

[danherbias07]

There have been many similar disputes, and it's still about prediction markets being viewed as a gambling industry. Well, it's not just about what they think of them. But some rules must be followed, and I think there's a bit of poison here. If they accept that they are a gambling industry and get a gambling license, the taxation is different, and I bet it is higher than being a prediction market only.

Thank you for that news, and I will follow this one. I am kind of curious about how those two companies will present their proof that they are not in the gambling industry.

[Ronsbit]

These organisations makes good profit from their market and they should understand that without users patronising their platforms, they would not be able to generate revenue for themselves and also these users belong to regions which are governed by laws and it is expected that any organisation benefiting from users of any region should be able to recognise the laws and government of that region because their nationals are patronising their services which they ought to reciprocate in same manners. It would be a difficult one for the organisation to defend themselves against the government.

[Oshosondy]

I wonder how this will end, because if these platforms are eventually required to obtain gambling licenses, wouldn't that make them practically the same as traditional sportsbooks?

Yes, that is just it. But I think they will also have more regulations to be followed, which is the reason many of the exchanges can not go for gambling regulations.

But as many people are saying prediction markets are gambling, it also have similarities to trading. Gambling regulators will still prefer to fight this for years before they will later accept.

[Agbe]

As for me they should just obtain the license and operate freely like other casinos. They can operate 2 in 1 platform which should be prediction market and other sportbooks and casinos games and I believe they will make more profit than relying solemnly on the prediction market. But before Missouri regulators come up with such argument, they must have tested the games prediction in the website. So they know it better.

[Orpichukwu]

I wonder how this will end, because if these platforms are eventually required to obtain gambling licenses, wouldn't that make them practically the same as traditional sportsbooks?

What do you think?

Cases like this will never end; more states in the US are going against the prediction market stands, which I also support. These platforms, which are licensed at the federal level and permitted to offer their type of service, should truly be defined, and they should not exceed what they should. This includes anything relating to sport betting. They should offer their service, or they should request a separate licence to cover that up.

I don’t know if the state can win against them in this since their stands will determine where every prediction market belongs. Maybe Crypto.com and Novig will be left with two choices: leave the market or obtain a state licence because I don’t see Missouri bending.

[KiaKia]

I wonder how this will end, because if these platforms are eventually required to obtain gambling licenses, wouldn't that make them practically the same as traditional sportsbooks?

I completely agree with your last question. If these platform are ultimately required to obtain any gambling license, there will be absolutely no difference left between them and traditional sportsbook! Under guise of federal commodity regulation, they are essentially passing off ordinary gambling under different name to line their own pocket. Yet, while licensed sportsbook are required to comply with regulation such as paying 10% tax, enforcing strict age verification and implementing measure to prevent gambling addiction then these prediction market blatantly disregard such law.

In my own worl presently I look at prediction markets the same way that I look at casinos and sportbooks, I don't see any difference than prediction market is far more easier to manipulate.

If Trump said to me that he is arresting Coinbase CEO tomorrow where am I heading? A prediction market and do the massive bid on it, I don't like the idea behind predictions on disasters and people's life at all.

Well it's just me, so many people have fun with these type of sick things I am not just one of them, I believe that this issue will be solved if they can have a different license for prediction markets.

[abel1337]

Prediction market industry are fairly new and the law around it is not concrete enough so there are confusion if countries/state would classify it as a good ol sport betting site that requires a license. These prediction market businesses are insisting it is different which doesn't need a license and states like Missouri wants to ofcourse gain something from it that's why they are requiring a license.

Sooner or later we will see a newly formed law on how these prediction market be classified. If somehow these businesses who are offering a prediction market acquired a license to abide the demand of Missouri, there's a high chance that other state and countries will do it as well.

If Coinbase, crypto.com, robinhood and others realized that it's not getting enough revenue vs the actual licenses they need, I'm sure they will just remove the prediction market on their websites and just stick to their original business line.

[Fortify]

Another instance where prediction markets and gambling are being linked, because just recently, Crypto.com and Novig filed lawsuits against Missouri regulators after receiving cease-and-desist orders over their sports prediction markets.

Missouri regulators argue that what these companies are offering is sports betting, therefore they should obtain gambling licenses, while these two companies insist that they are operating prediction markets that fall under federal regulation. Of course they have their legal arguments since Kalshi and Polymarket are doing something similar, but interestingly, I found out that these two platforms also received cease-and-desist orders from Missouri.

I wonder how this will end, because if these platforms are eventually required to obtain gambling licenses, wouldn't that make them practically the same as traditional sportsbooks?

What do you think?

This is unfortunately the way that corporate America works - businesses operate over much longer time frames with the intent to defeat individuals and government departments who are generally looking out for the public good. It doesn't help that the current US government is a cesspit of corruption that is encouraged from the very top downwards. The president himself is getting all kinds of back handers and actively engaged in trading to benefit his own family rather than running the country. It's possible that they know this won't win but if they can push the legislation back or suspend any sanctions for even a year or two it could be highly profitable. If they're able to defeat it then we're talking about hundreds of millions in annual profit that they get to keep. It's clearly gambling and states have long since placed their own restrictions around that, but federal changes have muddled the situation.

[Gozie51]

This matter will be determined in court. I think the legal question will be to determine if those prediction company are also seen and operate as betting sites for gambling. The state have issued a cease-and-desist order in September, lets see how the case will be determined. Maybe we are going to now merge prediction market and direct gambling as the same because the state is already seeing it as same. But IMO, it is better we don't preempt the court on the matter by further discussing it here. That will amount to sub judice and there is need to desist from that as it will be seen that we are trying to help the judge or court to decide the matter since the matter is already in court.

[acroman08]

Lol, they are doing the exact same thing Polymarket and Kalshi did when they got sued by different US states. If their prediction markets are operating in other states, I hope they get sued in those states too.

edit: I just remembered I posted that crypto.com and Novig(and other companies) got a cease and desist from Connecticut for offering markets on sports, if crypto.com and Novig don't comply, the state will probably sue them(hopefully).

I wonder how this will end, because if these platforms are eventually required to obtain gambling licenses, wouldn't that make them practically the same as traditional sportsbooks?

Anyway, even now, without having a gambling license, they are basically the same as any other sportsbooks, they just wrap it differently to bypass gambling laws in the US. Hopefully, it ends up with them being required to get a gambling license.

[Hispo]

If they are doing the same Kalshi and Polymarket are doing, then they should get a pass and be allowed to offer those betting markets for the general public to bet on. There should not be a double standard when comes to some platforms like prediction markets and exchanges which also wants to get into the same business.
If Missouri wants to make things right then they are supposed to also throw lawsuits against Kalshi and Polymarket.

The federal government should deal with all this instead of having individual states trying to regulate markets and platforms which are being offered nationwide.

[uneng]

I wonder how this will end, because if these platforms are eventually required to obtain gambling licenses, wouldn't that make them practically the same as traditional sportsbooks?

Yes. In fact, sportsbook and prediction market are the same thing, but lawyers like playing with the gaps on the legislation to take advantage of it... If casinos are enforced to obtain gambling licenses, it's fair that another companies operating similar services are enforced to obtain such licenses as well, otherwise, cease licenses for all of them!

At some point, all these markets where predictions are involved will be labelled as gambling activity, receiving the same treatment from regulators.

[el che]

If they are doing the same Kalshi and Polymarket are doing, then they should get a pass and be allowed to offer those betting markets for the general public to bet on. There should not be a double standard when comes to some platforms like prediction markets and exchanges which also wants to get into the same business.
If Missouri wants to make things right then they are supposed to also throw lawsuits against Kalshi and Polymarket.

The federal government should deal with all this instead of having individual states trying to regulate markets and platforms which are being offered nationwide.

Actually, Missouri’s Attorney General didn't single out just Novig and Crypto.com, they hit Kalshi, Polymarket, Robinhood and Underdog with cease and desist letters at the same time. Novig and Crypto.com are just the first ones to turn around and sue the state back in federal court.

[_act_]

Actually, Missouri’s Attorney General didn't single out just Novig and Crypto.com, they hit Kalshi, Polymarket, Robinhood and Underdog with cease and desist letters at the same time. Novig and Crypto.com are just the first ones to turn around and sue the state back in federal court.

I was surprised when I read that a regulator in one of the states in United States sued Crypto.com and Novig and I did not see Polymarket and Kalshi which are the ones that ste mostly sued, but it is good how you let us know about it. I think it will be good if the prediction markets all join hands together to fight the regulators. I think the fight between prediction markets and regulators in the United States has just began. It will still take a long period of time before gambling regulators will accept or win.

[X-ray]

Prediction market is always using CTFC to defend themselves, and we knew it's all Trump's agenda to give legalization to the prediction markets, but i think what Missouri has done is the right one. In fact, there is similarity between event contract run in the sport event and sportbook. It's all make sense they have to put prediction market in the same line as sportbooks.

Those prediction market only need to apply for the license, pay fees, then getting legalized to operate there. Why are they making it so difficult? i hope federal court is having some sense here.

Allowing prediction market to operate without license and fees when it's possessing same risk as sportbook is non sense thing.