A prediction market firm backed by actress Sydney Sweeney is asking a federal judge to block Missouri from classifying its business model as sports betting, which in Missouri carries taxes and regulations.

Last month, Missouri Attorney General Catherine Hanaway sent cease-and-desist letters to Novig and five of its prediction-market competitors. She chastised each firm for engaging in unlicensed sports betting under the auspices of sports “event contracts" offered by the different companies.

Novig filed the request late Friday afternoon in the Eastern District of Missouri court in St. Louis.

On a prediction market, users buy and sell contracts premised on a particular outcome of sporting events, elections or what color outfit a specific celebrity will wear on TV. A contract on the Chiefs winning the Super Bowl pays, for instance, $1 if the team wins and nothing if the Chiefs lose. Unlike a sportsbook, users trade against each other rather than against the house.

The Attorney General's letter gave each prediction market company until Oct. 17 to obtain a state Gaming Commission license and pay the state's 10% wagering tax, or stop operating in Missouri. Gaming licenses can cost up to $500,000.

The Attorney General's Office argues that bets placed on sports through a prediction market company, like Novig, should be treated and taxed the same as if it were made at a casino or a sports betting app, like FanDuel, according to a statement provided by spokesperson Colbey Stosberg.

“In both situations, it’s sports betting — and Missourians voted to subject sports betting to licensing and taxation rules,” the statement said.

Novig argues that when the federal Commodity Futures Trading Commission's designated its firm as a "contract market” in June, it preempted Missouri’s regulatory authorities.

Federal appeals courts have split on the question. So far this year, the 3rd Circuit sided with Kalshi while the 6th Circuit ruled that states may regulate the prediction markets. Meanwhile, the 8th Circuit, which covers Missouri, is weighing the same question in an Iowa case, with briefing planned for later this year.

Novig recently raised eyebrows with a social media ad featuring actress Sydney Sweeney, appearing to be nude except for strategically placed sports equipment. Sweeney took an undisclosed equity stake in the exchange last month and, according to Fortune, is listed as its creative director.

Missourians have wagered about $2 billion since sports betting began here Dec. 1, 2025, with $11.77 million in taxes collected by the state through July 2026.

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