Underdog has sued Missouri Attorney General Catherine Hanaway and officials of the Missouri Gaming Commission in federal court, seeking to block the state from enforcing its gambling laws against the company’s sports event contracts.

The complaint, filed by Underdog Exchange DCM Inc in the US District Court for the Western District of Missouri on 8 November, argues that the Commodity Exchange Act preempts state gambling law and that the Commodity Futures Trading Commission (CFTC) has exclusive jurisdiction over its federally registered exchange. Underdog filed a motion for a preliminary injunction the same evening. The case has been assigned to Judge Beth Phillips, according to the court docket.

The company is asking the court to bar state officials “from enforcing Missouri’s preempted gambling statutes against Underdog’s federally regulated derivatives markets”, according to reports of the complaint. It says the attorney general vowed enforcement action on 6 November, establishing a credible threat of prosecution. Missouri’s response is due on 21 December.

From cease-and-desist to court

The suit is the latest response to cease-and-desist letters Hanaway sent in mid-September to six companies offering sports event contracts in the state: Kalshi, Polymarket, Crypto.com, Novig, Underdog and Robinhood. The attorney general ordered the platforms to stop offering the contracts, describing them as unlicensed sports wagering, and gave them 30 days to comply.

“Companies cannot repackage sports bets as ‘event contracts’ to avoid Missouri law,” Hanaway said at the time, warning that failure to comply would result in enforcement action. Her office also said the platforms had allowed users under 21 to trade or lacked adequate safeguards, according to the letter sent to Underdog.

Underdog is now at least the fourth recipient to challenge Missouri in court. Crypto.com and Novig filed suit in October, Kalshi sued in the Eastern District of Missouri on 27 October and sought a temporary restraining order on 6 November, and Polymarket’s US arm filed its own case on 9 November. PrizePicks withdrew its sports contracts from the state. Robinhood has not sued.

Eighth state, same argument

Missouri is the eighth state Underdog has taken to court over event contracts. It has previously filed against Ohio, Massachusetts, Wisconsin, New Mexico, Washington, Connecticut and, in October, Tennessee. The preemption argument has had mixed results in federal courts, and the question is now being pressed on several appellate fronts.

Missouri’s position carries particular weight because the state legalised sports betting by referendum. Voters approved Amendment 2 in November 2024 and licensed sportsbooks launched on 1 December 2025. Underdog gave up its Missouri sportsbook licence before launch, leaving its exchange product as its route into the market.

Utah escalation

The Missouri filing comes as the fight intensifies in Utah, where the attorney general filed 14 criminal counts, 13 of them felonies, against Kalshi and its co-founders on 28 October. The CFTC and the Department of Justice have since sued Utah to stop the state acting against federally regulated exchanges. Judge Robert Shelby has set an expedited schedule, with Utah’s response due on 11 November and a hearing on preliminary relief scheduled for 20 November.

With states pursuing civil suits, cease-and-desist orders and now criminal charges, and the CFTC increasingly intervening on the exchanges’ side, the jurisdictional conflict is moving towards the federal appeals courts and, potentially, the Supreme Court. The trade press, including SBC Americas and Gambling Insider, reported the Missouri filing on Monday.

Polymarket’s affiliate PM Derivatives LLC has been approved by the National Futures Association (NFA) to operate as a futures commission merchant (FCM), giving the prediction market its own regulated broker in the United States.

The approval, announced in early November, allows PM Derivatives to accept customer orders and hold customer funds as a broker, subject to the rules of the Commodity Futures Trading Commission (CFTC) and the NFA, the US derivatives industry’s self-regulatory body.

Fully collateralised, for now

The unit will operate exclusively on a fully collateralised basis, meaning every position must be funded in full at the time of the trade, according to Finance Magnates and FX News Group. That rules out leverage for now. The company said any future margin offering would require additional regulatory approval.

An FCM is the US equivalent of a futures broker: it sits between customers and the exchange, handles know-your-customer and anti-money laundering checks, and must keep customer money segregated from its own. FCMs face minimum capital requirements and regular NFA examinations, a heavier compliance load than the introducing-broker and app-partner arrangements many prediction market platforms have used to reach customers so far.

Polymarket filed applications in July to build out the infrastructure needed for margin trading in the US, a step widely seen as a move to compete more directly with Kalshi, which has been expanding its own brokerage and clearing capabilities.

“Becoming an approved FCM is a foundational step for PM Derivatives,” said Nikhil Joshi, chief executive of PM Derivatives.

Three-part structure complete

The broker approval completes Polymarket’s regulated US stack, with each function held in a separate affiliate. QCX LLC, which trades as Polymarket US, is the CFTC-designated exchange; QC Clearing LLC acts as its clearing house; and PM Derivatives now provides the brokerage layer. Existing FCMs and brokerage partners will keep their own access to Polymarket US markets.

Owning the broker gives Polymarket direct control of customer onboarding and funds rather than relying solely on intermediaries, a model that has helped rivals scale distribution through apps and partners. It also brings the company’s US customer relationships more fully inside the federal derivatives regime, at a time when its legal position against state gambling regulators rests on being a federally supervised market.

Regulatory backdrop

The approval comes as the federal and state fight over sports event contracts intensifies. Polymarket and Kalshi were both named as partners when the NBA signed an integrity agreement with the CFTC last month, while states including Utah, New Jersey and Arkansas continue to pursue enforcement action against prediction markets offering sports contracts without a gambling licence.

Polymarket is also not the only new entrant building out a federally regulated structure. Betting exchange Sporttrade recently won CFTC registration as both an exchange and a clearing house, adding to the number of venues able to list event contracts nationwide.

For traditional sportsbooks, the significance lies less in the brokerage licence itself than in what it points to: if margin trading is approved, prediction markets would be able to offer leveraged positions on sporting outcomes, a product no state-licensed bookmaker can match.

Ireland’s Department of Justice has said it wants to bring in the Gambling Regulation Act’s daytime advertising ban and its prohibition on inducements “as soon as is legally and operationally feasible”, but has declined to give a timeline for either measure.

The advertising provisions of the 2024 Act “have not been commenced as yet”, a department spokesperson told the Racing Post last week. “It is not possible at this juncture to provide a timeline for the commencement of the provisions in respect of advertising,” the spokesperson added.

What is still waiting

Two of the Act’s most contested measures remain on hold. The first is a watershed banning gambling advertising on television, radio and on-demand services between 5.30am and 9pm. The second is a ban on licensees offering inducements, such as free bets and bonuses, to a person or group of people, with the minister able to set conditions through regulations.

Both need a commencement order from the minister for justice, home affairs and migration, Jim O’Callaghan. The department said work on commencing the outstanding provisions is ongoing with the Office of the Attorney General and that the minister “is supportive of their commencement” at the earliest feasible point.

It also made clear that the advertising protections are tied to licensing. They are contingent on licences being issued by the Gambling Regulatory Authority of Ireland (GRAI), the spokesperson said, because the restrictions are framed as conditions on licensed operators.

Several other obligations are already live, including a potential prison sentence of up to eight years for allowing a child to gamble and a bar on unreasonably withholding a customer’s winnings.

Licensing still in progress

The GRAI began issuing remote betting and betting intermediary licences in July, but the licensing of all operators is not yet complete. The regulator has also faced budget constraints: it told the minister earlier this year that it had been allocated €13.35m for 2026, about half the €26m it requested, and it pushed back the start of online gaming licensing as a result. The government announced a €22.5m budget for the authority for 2027 in October.

The GRAI aims to become self-financing within three years through levies on licensees and a turnover-based social impact fund.

Racing’s concerns

The watershed has been the most fiercely debated element of the Act. Racing TV has said repeatedly that a 5.30am to 9pm ban would make its Irish coverage economically unviable, because betting sponsorship and advertising underpin its broadcasts of daytime race meetings. Broadcasters and sports bodies have lobbied for carve-outs, while public health campaigners have pressed for the measures to be commenced without further delay.

For operators, the inducements ban is likely to have the greater commercial impact, given how central sign-up offers and free bets are to customer acquisition in a market dominated by a handful of large bookmakers.

The Act also gives the GRAI powers to restrict gambling advertising on social media, including requiring that adverts be shown only to people who have opted in, and to bar sponsorship aimed at children. How quickly those measures follow will depend on the same licensing timetable.

Until the minister signs the commencement orders, operators licensed by the GRAI can continue to advertise during the day and run promotional offers under existing codes. The department’s statement suggests that is unlikely to change before the regulator has its licensing regime fully in place.