Missouri AG reviews Kalshi’s sports betting taxes

• Missouri AG Catherine Hanaway is reviewing whether prediction markets offering Kansas City Chiefs contracts should pay the same taxes as licensed sportsbooks.
• Her office is examining Kalshi and Robinhood, which offers Kalshi’s contracts through its Robinhood Derivatives brokerage, adding Missouri to a growing list of states challenging the federal framework for sports event contracts.
• The review follows an August 28 Ninth Circuit ruling that Kalshi was unlikely to show federal law preempts Nevada’s gaming rules over its sports contracts.

Missouri Attorney General Catherine Hanaway wants prediction markets offering contracts on Kansas City Chiefs games to face the same taxes and gambling rules as licensed sportsbooks.

Her office is reviewing platforms including Kalshi and Robinhood, adding Missouri to a growing list of states challenging the federal framework prediction markets use for sports event contracts.

Same bet, different rules

Hanaway is drawing a clear line between financial event contracts and products that operate much like conventional sports bets. Licensed Missouri sportsbooks answer to the Missouri Gaming Commission and pay 10% of adjusted gross revenue, a structure in place since Missouri’s sportsbook launch went live in December 2025.

Catherine Hanaway, Missouri Attorney General, said:

“If these prediction markets allow sports betting on their platforms, then we think they should pay the same taxes as any of those other platforms and have the same regulatory structure.”

Kalshi argues its event contracts fall under the federal Commodity Exchange Act and CFTC oversight, not state gambling law. Robinhood does not run its own prediction market; it offers Kalshi’s sports contracts, along with products from ForecastEx, through its Robinhood Derivatives brokerage.

That federal registration can leave contracts tied to Chiefs games outside Missouri’s sportsbook tax and licensing system, even though customers can take positions tied to the outcomes of the same games. Licensed operators now compete against event contract platforms that argue state gambling law does not reach their products.

Hanaway said:

“When it’s a bet, it’s historically been left to the states to regulate the gambling markets.”

Nevada’s opening move

The Missouri review lands weeks after a pivotal appeals court ruling. On August 28, the Ninth Circuit held that Kalshi was unlikely to show that federal commodities law preempted Nevada’s gaming rules as applied to its sports event contracts, allowing Nevada’s enforcement to proceed while the underlying case continues. The panel noted that CFTC regulations currently prohibit offering gaming-related contracts on the exchanges Kalshi uses.

That decision conflicts with the Third Circuit’s April ruling in a separate Kalshi dispute with New Jersey, which sided with Kalshi’s argument that the CEA preempts state interference with CFTC-designated contract markets. The circuit split raises the odds that the broader question of state versus federal authority eventually lands before the Supreme Court.

The CFTC itself has sued nine states, including Arizona, Connecticut and Illinois, arguing it holds exclusive jurisdiction over event contracts and that state gambling laws cannot reach them.

Missouri joins a widening list of states pressing the same argument through different channels. Connecticut has accused Kalshi of running unlicensed sports wagering through a civil lawsuit, and Washington has ordered the platform to geofence sports, election and “mentions” contracts by September 2 or face daily fines.

A Kalshi spokesperson said after the Ninth Circuit ruling that the company still believes CFTC regulations do not prohibit sports contracts and that it would seek further review. Missouri has not announced any enforcement action against Kalshi or Robinhood. Hanaway’s office says it is still examining whether contracts offered in the state should sit under the sportsbook framework.

A separate question

Hanaway is taking a different position on political contracts. Missouri has no statute that specifically bans election betting, a gap Hanaway says is for lawmakers, not her office, to close, even as 32 states restrict election wagering in some form.

She said:

“With respect to whether they should be allowed to bet on the election, that to me is an issue for the legislature. It’s my job to enforce the law.”

That leaves Missouri lawmakers, not the courts, to settle the election betting question separately from the sports contract dispute. Kalshi and other prediction market operators maintain that their event contracts are federally regulated financial products rather than state regulated gambling, a framing a growing number of states now reject once sports outcomes are involved.

Missouri’s review does not yet carry the weight of a formal tax assessment or enforcement action. But paired with the Ninth Circuit’s decision and the parallel fights in Connecticut and Washington, it signals that state attorneys general are treating Kalshi’s sports contracts as a licensing and revenue question first, leaving the deeper jurisdictional fight between state gambling law and federal commodities law for the courts to settle.