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Novig has filed lawsuits against Massachusetts, New Mexico, New York, and Washington within a week of launching sports event contracts, challenging each state’s authority to enforce gambling laws against its prediction market offerings.
The company filed its first suit in New York a day after the launch, followed by suits in the other three states.
All four states named in Novig’s lawsuits have pursued temporary restraining orders or preliminary injunctions against prediction market operators during 2026. Novig’s legal filings argue that its sports event contracts fall exclusively under federal oversight through the Commodity Futures Trading Commission (CFTC), placing them outside the reach of state gambling statutes.
The lawsuits ask courts for preliminary injunctions to block enforcement of state gambling laws against the company.
Novig’s counsel wrote in the New York filing: “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.”
Legal analyst weighs in on timing
Daniel Wallach, founder of Wallach Legal and UNHLaw Sports Wagering, said in a social media post that Novig’s odds of prevailing in Massachusetts, New York, and Washington appear limited given recent court decisions that have sided with state regulators.
He noted, however, that the litigation strategy could still deliver practical value: “Prospects for success are dim in MA, NY & WA in light of recent PM court rulings favoring states, but that may be besides the point. Preemptive federal suits ensure 90+ day uninterrupted launch while allowing enough time for possible appellate reversals.”
Prospects for success are dim in MA, NY & WA in light of recent PM court rulings favoring states, but that may be besides the point. Preemptive federal suits ensure 90+ day uninterrupted launch while allowing enough time for possible appellate reversals (CA1, 2 & 9 & MSJC). https://t.co/SeHEzRW0Fu
— Daniel Wallach (@WALLACHLEGAL) August 9, 2026
Washington secures injunction against Kalshi
Washington’s case against prediction markets predates Novig’s suit. Attorney General Nick Brown filed a lawsuit against Kalshi in March, and in late July the state secured a preliminary injunction against the company.
King County Superior Court Judge John McHale ruled that the state demonstrated a “likelihood of success on the merits” regarding claims that Kalshi’s event contracts, including sports offerings, violate provisions of the Washington Gambling Act. The injunction, once issued, will bar Kalshi from offering sports event contracts in the state on a temporary basis.
New York pursues $36 billion claim
New York’s dispute with designated contract markets has continued for roughly a year. The state’s most recent action against Kalshi seeks $36 billion in damages tied to allegations of illegal gambling.
After courts denied Kalshi’s request for emergency relief in July, Governor Kathy Hochul and Attorney General Letitia James announced the lawsuit, accusing the platform of running an unlicensed gambling operation in the state.
Hochul said in a statement: “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.
“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.”
Massachusetts and New Mexico add to litigation wave
Massachusetts filed its own lawsuit against Kalshi last September, alleging the company accepted online sports bets in the commonwealth without securing a license or complying with state betting laws.
The complaint contends Kalshi’s sports event contracts avoid consumer protections required of licensed operators and that the company has not completed the Massachusetts Gaming Commission’s review process.
The suit also alleges Kalshi permits users between 18 and 21 to trade contracts, despite the state’s legal sports betting age of 21.
In New Mexico, Attorney General Raúl Torrez announced in June that the state Department of Justice had sued Kalshi, Inc. and KalshiEX LLC over allegations of unlicensed sports betting operations.
Torrez said in a statement: “New Mexico has a longstanding and carefully balanced system for regulating gaming that protects consumers, ensures accountability, and respects tribal sovereignty.
“The only lawful gaming in New Mexico operates either under tribal-state gaming compacts or under strict state regulations to ensure honest gaming free from corruption, and licenses gaming operators only after they explain how they plan to address compulsive gambling.
“Kalshi has ignored that framework entirely while offering online sports betting within the state. We are filing this lawsuit to protect the integrity of our laws, our regulatory system, and most importantly, consumers.”
The CFTC filed suit against New Mexico following the state’s legal action against Kalshi.