Warning: Undefined array key "post_type_share_twitter_account" in /var/www/vhosts/casinonewsblogger.com/public_html/wp-content/themes/cryptocurrency/vslmd/share/share.php on line 24
Novig has filed a federal lawsuit against New York regulators after launching its sports prediction market platform across 47 states, challenging the state’s authority to restrict its event contracts.
The company is seeking a preliminary injunction against New York Attorney General Letitia James and members of the New York State Gaming Commission, arguing that its prediction markets fall under federal oversight through the Commodity Futures Trading Commission (CFTC).
Novig received approval as a Designated Contract Market (DCM) from the CFTC on June 16 and introduced its sports event contracts shortly afterward. The company’s legal filing came one day after the nationwide launch.
The dispute follows a series of legal challenges involving prediction market operators and state regulators, with companies arguing that federally regulated event contracts should not be treated as traditional sports wagers.
Novig Challenges State Gambling Oversight
Novig’s lawsuit was filed in the U.S. District Court for the Southern District of New York. The company argues that New York’s previous actions against other prediction market operators indicate that similar enforcement efforts could be directed toward its platform.
“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 § 63(12) for offering the type of contracts at issue here. Novig, having just secured its status as a Designated Contract Market (“DCM”) registered by the CFTC, brings this action to prevent Defendants from doing the same to Novig,” counsel wrote in the lawsuit, Covers reports.
The company is asking the court to prevent New York from applying its gambling and sports betting regulations to Novig’s sports event contracts while the case continues.
“Despite the CFTC’s exclusive jurisdiction over event contracts, Novig expects that New York will imminently bring an enforcement action against it along the same lines as the other lawsuits that Defendants have already brought against similarly situated parties. New York’s threatened enforcement of its laws is preempted several times over,” counsel wrote.
Novig said its platform differs from traditional sportsbooks because it operates through federally regulated event contracts. The company also highlighted that it requires users to be at least 21 years old.
Legal Disputes Expand Across Prediction Markets
New York has become a key jurisdiction in the ongoing debate over prediction market regulation. The state recently filed legal action against Kalshi, alleging that the company was offering an illegal gambling platform.
Governor Kathy Hochul and Attorney General Letitia James announced the lawsuit against Kalshi after the company sought legal protection from state enforcement efforts. Kalshi has argued that its contracts are regulated by the federal government through the CFTC.
“Kalshi has chosen to ignore New York’s gaming laws, which exist to protect consumers, prevent problematic gambling, deliver funding for critical public services, and ensure that every company plays by the same rules,” Hochul said in a released statement. “This choice has consequences, and working closely with Attorney General James, New York is taking action to stop this illegal behavior and bring Kalshi into compliance, because no company is above the law.”
A federal court previously rejected Kalshi’s request for a preliminary injunction against New York. U.S. District Court for the Southern District of New York Judge Analisa Torres denied the request in early July.
Novig’s case adds another legal challenge involving the boundaries between federal derivatives regulation and state gambling laws.
Sports Prediction Platform Expands Nationwide
Before entering prediction markets, Novig operated in different forms within the sports betting sector. The company launched as a state-licensed sportsbook in Colorado in 2024, later shifted to a sweepstakes model, and eventually moved into prediction markets.
Unlike some competing platforms, Novig focuses exclusively on sports-related event contracts.
The company said it has already generated more than $6 billion in trading volume. CEO Jacob Fortinsky said the platform was created to provide sports fans with a different way to engage with markets connected to competitions they follow.
“For too long, sports fans have had limited ways to engage with the markets they know best,” Fortinsky said. “They are among the most passionate and informed communities in the world, yet they’ve never had a platform truly built around how they think, engage, and trade.”
He added that Novig built its platform around transparency and responsible participation measures.
“We built Novig to change that, not only by creating the best place to trade sports, but by setting the standard for what a modern sports prediction market should be. That has meant building with trust, transparency, and responsible participation at the center, including maintaining a 21+ age requirement and investing in the compliance, market surveillance, and safeguards needed to scale responsibly,” he said.