Novig Launches in 47 States, Immediately Sues Four States
Key Points
- Novig opened its sports-event trading platform across 47 states on August 4, operating through the CFTC-regulated Ludlow Exchange.
- The company filed federal lawsuits against New York, New Mexico, Washington, and Massachusetts between August 5 and August 7.
- Novig argues that the Commodity Exchange Act gives the CFTC exclusive authority over contracts traded on federally designated exchanges.
- The cases could determine whether Novig can maintain broad national access or must withdraw from states that treat sports contracts as unlicensed gambling.
Novig Launches Its Sports Prediction Market in 47 States
Novig launched its federally regulated prediction markets platform in 47 states on August 4, expanding its sports-event trading product through an exchange overseen by the Commodity Futures Trading Commission.
The company’s operating subsidiary, Ludlow Exchange LLC, was designated as a contract market by the Commodity Futures Trading Commission on June 16. That designation allows Ludlow to operate a federally regulated derivatives exchange, subject to the Commodity Exchange Act and the CFTC’s designated-contract-market rules.
The launch gave Novig broad national distribution for its sports contracts, although the company’s access in several states immediately faced potential challenges from gambling regulators.
What Novig’s Regulated Exchange Offers
Novig said its August 4 launch introduced instant live trading, deeper liquidity, expanded payment options, market surveillance, and screening intended to prevent manipulation and insider activity. Unlike several other prediction market platforms, Novig requires customers to be at least 21 years old.
The company also said it had surpassed $6 billion in cumulative trading volume before the nationwide rollout. That figure comes from Novig’s launch announcement and includes activity from the platform’s earlier iterations, rather than volume generated by the newly launched CFTC-regulated exchange alone.
“For too long, sports fans have had limited ways to engage with the markets they know best,” Novig co-founder and CEO Jacob Fortinsky said in the announcement. Fortinsky said the company intends to establish “the standard for what a modern sports prediction market should be.”
Novig uses a central order book that matches traders against one another. The exchange does not set conventional betting lines or take the opposing side of each position in the same manner as a bookmaker.
Four Complaints Filed in Three Days
Novig’s New York complaint, filed on August 5, names Attorney General Letitia James and officials from the New York State Gaming Commission. The company cited the state’s previous actions against Kalshi and Coinbase as evidence that enforcement against Novig was imminent.
“New York has moved aggressively against federally regulated event-contract trading within its borders,” Novig said in the complaint.
New Mexico and Washington cases followed on August 6. The New Mexico docket names Attorney General Raúl Torrez and members of the New Mexico Gaming Control Board, while the Washington complaint targets state gambling officials and Attorney General Nicholas Brown.
Novig then brought a comparable case against Massachusetts officials. Its Massachusetts complaint points to Attorney General Andrea Campbell’s successful effort to secure a state-court injunction preventing Kalshi from offering sports contracts in the Commonwealth.
All four states had already pursued emergency restrictions against federally regulated prediction market businesses. Novig’s lawsuits seek to move the jurisdictional dispute into federal court before those regulators bring comparable enforcement actions against its platform.
Novig Says Federal Law Overrides State Gambling Rules
The four complaints are built around the same argument: sports event contracts traded on a designated contract market are swaps regulated under the Commodity Exchange Act, placing them within the CFTC’s exclusive jurisdiction.
Novig wants the courts to declare that the federal statute preempts state gambling and sports-wagering laws when those laws are applied to contracts listed on its exchange. It is also seeking injunctions that would prevent state officials from bringing enforcement actions against the platform.
The company argues that allowing each state to impose separate gambling requirements would undermine the national regulatory system Congress created for derivatives markets. As Novig put it in its New York filing, “a national market cannot function under fifty regulators.”
State officials have taken the opposite position in cases involving Kalshi and other exchanges. Their argument is that contracts tied directly to sporting events function as sports wagers and remain subject to state licensing, consumer-protection, taxation, and gambling laws, regardless of the trading venue’s federal designation.
Why This Matters for Bettors
For bettors, the immediate issue is access. Novig’s ability to keep offering sports markets in these four states will depend on whether federal judges prevent regulators from treating the platform as an unlicensed gambling operator.
A victory would give users in contested states another alternative to conventional sportsbooks, with market-driven prices, live trading, and the ability to exit positions before settlement. A loss could lead to state-specific geofencing, fewer available contracts, or a withdrawal from individual markets while appeals continue.
Greater competition can improve pricing and product choice, but prediction market liquidity is not unlimited. Every new exchange divides trading activity across another order book. Novig will need enough active traders and market makers to maintain competitive spreads, particularly on live and lower-profile events where thin liquidity can erase the theoretical pricing advantage over a sportsbook.
The lawsuits also expose the regulatory bargain behind the prediction market model. Operators gain the ability to pursue national distribution without securing a sportsbook license in every state, but that reach increasingly comes with the cost and uncertainty of federal litigation. Novig filed four cases within three days of launch, showing that courtroom strategy has become part of the operating model rather than a response reserved for an unexpected enforcement action.
For the broader market, Novig’s arrival makes the federal-state dispute less dependent on Kalshi. State regulators are now confronting multiple CFTC-designated exchanges making substantially the same preemption argument. A favorable ruling for one operator could strengthen the others, while conflicting decisions would preserve an unstable patchwork of state access rules.
What Happens Next
The New York case is likely to produce the first meaningful procedural decision. Novig requested emergency relief, but the attorney general’s office has argued that the company sought a temporary restraining order without providing adequate notice and has asked the court to use a standard briefing schedule.
U.S. District Judge Analisa Torres, who previously denied Kalshi preliminary protection from New York enforcement, will decide whether Novig has demonstrated an imminent threat strong enough to justify emergency intervention. No court has yet ruled on the merits of Novig’s federal-preemption claims.
The defendants in Massachusetts, Washington, and New Mexico will also have opportunities to challenge whether Novig can sue before an enforcement action has been filed directly against it. Those arguments could produce different outcomes across federal districts even though the four complaints rely on nearly identical legal theories.
The CFTC’s pending event-contract rulemaking will run alongside the litigation. The agency’s June proposal would establish a framework for reviewing contracts involving sports, gaming, and other activities specifically identified in the Commodity Exchange Act.
Until the courts or Congress provide a more definitive division of authority, Novig’s availability in aggressive enforcement states could change quickly. The platform launched with national ambitions, but its ability to deliver consistent access now depends on four federal courts agreeing that its CFTC designation is enough to keep state gambling regulators out.
Marcus has spent over 20 years navigating the legal side of online betting - from his early days consulting for offshore operators to helping licensed U.S. sportsbooks launch in regulated markets. He’s worked with compliance teams, reviewed licensing frameworks in 15+ states, and advised on some of the biggest regulatory shifts since PASPA was repealed.
At BettingScanner, Marcus serves as the voice of reason - translating legalese into plain English and helping bettors understand what’s legal, what’s risky, and where the gray areas live. If you’re ever unsure about the rules, Marcus is your man - as he probably helped write them.
