Novig Launches Prediction Market Platform Nationwide, Then Sues New York to Keep Operating There
One day after its nationwide prediction market launch, Novig sued New York to block state enforcement of gambling laws against its federally regulated sports contracts.
Novig launched its federally regulated sports prediction market nationwide on August 4, and one day later, the company sued the state of New York to keep regulators from shutting it down there. The lawsuit, filed in the U.S. District Court for the Southern District of New York, names New York Attorney General Letitia James and members of the New York State Gaming Commission as defendants, with Novig seeking a preliminary injunction to block the state from enforcing its gambling laws against the platform.
The timing was no accident. Novig went live in 47 states on Tuesday through its CFTC-registered exchange unit, Ludlow Exchange, then asked a federal judge for cover before New York could bring an enforcement action of its own. New York has already sued two other prediction market operators, Kalshi and Coinbase Financial Markets, under Executive Law Section 63(12) for offering similar sports event contracts, and Novig’s legal team wants to head off the same treatment before it starts.
A Federal Argument Built on Kalshi’s Playbook
Novig’s case leans on the same core argument prediction market operators have made across the country: that sports event contracts are financial derivatives regulated exclusively by the Commodity Futures Trading Commission under the Commodity Exchange Act, not gambling products subject to state licensing. “New York has moved aggressively against federally regulated event-contract trading within its borders, suing both KalshiEX LLC and Coinbase Financial Markets, Inc. under Executive Law Section 63(12) for offering the type of contracts at issue here,” Novig’s counsel wrote in the complaint. “Novig, having just secured its status as a Designated Contract Market registered by the CFTC, brings this action to prevent Defendants from doing the same to Novig.”
That preemption theory has not fared well in New York so far. U.S. District Judge Analisa Torres denied Kalshi’s request for similar relief, writing that “Kalshi has not, therefore, made a clear or substantial showing that it is likely to succeed on the merits.” New York’s stakes in these fights keep escalating, too — the state is seeking a minimum of $36 billion in damages from Kalshi in a separate suit filed July 31. No hearing date has been set yet on Novig’s injunction request.
From Betting Exchange to Sweepstakes Book to Federal Exchange
Novig’s path to this lawsuit traces back through several business models. The company launched in 2022 as a peer-to-peer betting exchange, briefly operated as a licensed sportsbook in Colorado, and then pivoted in 2024 to a sweepstakes sportsbook model to reach a national audience without state-by-state licensing. That changed on June 16, when the CFTC designated Novig’s Ludlow Exchange unit as a Designated Contract Market, clearing the way for this month’s nationwide relaunch as a fully regulated prediction market.
The rebuilt platform now offers contracts on the NFL, MLB, UFC, PGA Tour, and men’s and women’s tennis and basketball, along with player props and season-long futures — but notably nothing tied to politics, culture, or finance, keeping the product entirely sports-focused. Novig says it has already generated more than $6 billion in cumulative trading volume and recently became the New York Mets’ official prediction market partner. The company also touts a 21-and-over age requirement, positioning itself as the only sports prediction market currently enforcing that standard, a detail it’s using to argue its platform already mirrors the responsible-gambling safeguards state regulators claim to want. Trading is available nationwide except in Arizona, Michigan, and Nevada, with eligibility tied to a user’s physical location rather than state of residence.
What Comes Next
The outcome hinges on the same unresolved legal question running through every prediction market case nationwide: whether sports event contracts are commodities under exclusive federal jurisdiction or wagers subject to state gambling law. Torres’s ruling against Kalshi suggests judges in the Southern District of New York aren’t rushing to embrace the preemption argument, but Novig is betting that its fresh DCM designation and untested standing will get a different look. Until a judge rules, or New York moves first, Novig’s contracts remain live and trading in the state it’s now suing to stay in.
For fans exploring the sports trading space themselves, this legal fight is playing out right alongside a wave of new platforms competing for market share — bettors weighing the options can compare offers through resources like the Novig Promo Code guide or check out the full breakdown in the Novig Review before deciding where to trade.