Gambling addiction expert says prediction markets put young Missourians at risk; Missouri attorney general takes action
Missouri's attorney general sent cease-and-desist letters to six prediction market companies, accusing them of illegal sports betting, while an addiction expert warns young people are at risk.Summary
Missouri Attorney General Catherine Hanaway sent cease-and-desist letters to six prediction market companies—Polymarket, Kalshi, Crypto.com, Novig, Underdog, and Robinhood—accusing them of operating illegal sports betting by facilitating sports "event contracts" that constitute unlicensed sports wagering under Missouri law. Hanaway stated that Missouri voters approved a safe, well-regulated sports wagering market supporting public education and addressing problem gambling, and companies cannot repackage sports bets as "event contracts" to avoid Missouri law. She noted that federal courts have ruled online sports wagering platforms are subject to state gambling laws and that federal law does not preempt state law in this area.
Missouri voters approved Amendment 2 in 2024, legalizing and regulating sports betting under the Missouri Gaming Commission, with the market launching December 1, 2025. The framework includes a 10% tax on gross receipts and requires age verification to prevent anyone under 21 from placing a wager. Hanaway said the companies either permit underage users or lack adequate safeguards, and they must comply immediately or face enforcement action.
Robinhood and Polymarket responded that their event contracts are federally regulated by the CFTC. Other states have taken similar action, and a federal court this week ruled in favor of California tribes in a lawsuit against Kalshi. Taylor Brown, with Midwest Recovery Centers, warned that young people are particularly vulnerable to gambling addiction due to easy access on phones, describing it as a "flood of dopamine." In the first eight months of legal sports betting, Missouri collected $11.8 million in taxes, but prediction markets do not pay the state's 10% sports betting tax.
(Source：Kctv5 News)