Missouri Attorney General Catherine Hanaway is pursuing cease-and-desist action against prediction-market companies operating in the state, while Montana has agreed to pause enforcement against Kalshi under a stipulation filed in federal court. The developments, reported September 18, 2026, mark the latest moves in a state-by-state fight over how sports event contracts should be regulated.
Hanaway told Heartland News that she views sports event contracts as gambling under Missouri law regardless of how prediction markets structure their fees compared with traditional sportsbooks. She said the products function the same way FanDuel and other licensed operators take bets on sporting events, even if the fee model looks different on paper.
Missouri’s Enforcement Path
Missouri’s stated goal is to bring prediction-market companies under state gaming law and require them to pay gambling taxes. Hanaway said her office is open to a settlement and is hopeful one can be reached, pointing to Kentucky as a state that pursued enforcement earlier this year and is now close to a deal.
If no agreement materializes, Hanaway said Missouri will sue. She also raised consumer-protection concerns tied to Kalshi and Polymarket, including age verification and the potential for insider trading, and acknowledged that prediction-market companies could respond by filing suit against the state in federal court.
Montana’s Stipulation With Kalshi
Montana’s arrangement with Kalshi is procedural rather than a resolution on the merits. Under a joint stipulation filed September 17, Montana agreed not to pursue enforcement, investigations or cease-and-desist proceedings against Kalshi’s event contracts until the later of a denial of further Ninth Circuit review or an en banc decision. Kalshi, in turn, is dropping its Montana lawsuit while that non-enforcement window holds.
Once the review period ends, Montana must give Kalshi 30 days’ written notice before taking any action. The stipulation is tied directly to Kalshi’s September 9 petition seeking rehearing of the Ninth Circuit’s August 28 ruling in the consolidated Nevada case, keeping Montana’s posture linked to how that appellate fight unfolds.
A Wider State-Federal Standoff
Missouri and Montana are just two pieces of a much larger dispute over whether states can apply gambling law to federally regulated event contracts. Connecticut, New York, Arizona, Iowa and Massachusetts all have active prediction-market matters in progress, and the Ninth Circuit recently sent a challenge brought by two California tribes back to the district court for further proceedings.
On the federal side, the CFTC has broadened its no-action relief for software providers that give users access to event-contract markets. The September 17 letter lets qualifying passive providers offer order-routing interfaces to registered exchanges without registering as introducing brokers, so long as they don’t hold customer assets, generate buy or sell signals, or control order execution.
What Comes Next
Missouri’s path forward hinges on whether Hanaway’s office can reach a settlement similar to Kentucky’s; absent that, litigation appears likely. Montana’s non-enforcement commitment remains tied to the outcome of Kalshi’s Ninth Circuit rehearing bid, with the 30-day notice requirement setting the clock once that process concludes. Neither state action resolves the underlying question of whether sports event contracts are gambling products or federally preempted derivatives – a question still working through courts in multiple states and, potentially, the U.S. Supreme Court.
The post States Clash Over Whether Event Contracts Are Gambling appeared first on ReadWrite.
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This articles is written by : Nermeen Nabil Khear Abdelmalak
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