Underdog Files Lawsuit to Stop Missouri Enforcement Action

Underdog isn’t waiting around while the Show-Me State attempts to show it the door.

The operator filed a lawsuit in the US District Court for the Western District of Missouri, asking it to halt impending enforcement action against its prediction platform. This action includes fines and other penalties the state could attempt to assess for the platform’s sports markets. 

While online sports betting is legal in Missouri, sportsbooks have argued they aren’t subject to the state’s taxes and regulations. The Commodity Futures Trading Commission argues it has sole authority to regulate sports prediction markets, but states like Missouri are challenging that in court.

In September, Hanaway sent cease-and-desist letters to Underdog, Robinhood, Novig, Crypto.com, Kalshi, and Polymarket, accusing them of offering an illegal form of sports betting. 

“Missourians voted for a safe, well‑regulated sports wagering market that supports public education and addresses problem gambling.” Hanaway shared in a press release announcing the action. “Companies cannot repackage sports bets as ‘event contracts’ to avoid Missouri law. We will enforce the rules voters approved and protect consumers. Any company that wants to offer sports wagering in Missouri must be licensed by the Missouri Gaming Commission, pay the required taxes and fees, and ensure no one under 21 can place a bet.”

This gave operators reason to file preemptive lawsuits to keep their markets live as Missouri took them to court.

Bi-Partisan Opposition Continues

When the legal battles over sports prediction markets first began, opposition mostly came from states led by Democrats. The White House’s support for the emerging industry kept many Republicans in support, but that has changed over the last year.

Deeply conservative Utah is currently locked in a legal battle against Kalshi, which has refused to halt sports markets in the state. Its lawsuit includes an amicus brief signed by 37 attorneys general, supporting Utah’s right to enforce its gambling laws against the industry.

This unity between Democrats and Republicans came at a time when the two parties were as divided as possible. Their ability to unite to oppose sports prediction markets is a bad sign for the industry, which will now turn to the US Supreme Court as its last hope.