Novig has sued New York state authorities, seeking a ruling that state gambling laws do not apply to prediction markets regulated under the federal Commodity Exchange Act. The company filed one day before launching its CFTC-licensed platform nationwide.
The move pre-empts regulatory action. New York last week sued rival Kalshi, demanding $36 billion in damages. Novig filed in federal court to avoid state-level proceedings, where prediction markets have lost cases before.
Novig restricts access to users over 21, unlike Kalshi and other platforms. That answers one New York complaint: the state issued Kalshi a subpoena demanding transaction data for under-21 users on sports contracts.
Novig began as a sportsbook in Colorado, switched to a sweepstakes model, then pivoted to a prediction market last year. The company raised $75 million in February as part of its application for CFTC licensure as a Designated Contract Maker.
Ahead of launch, Novig signed a partnership with the New York Mets — the first such deal between a prediction market and an MLB franchise. The company holds MLB Authorized Prediction Market status, granting access to official league data.
Co-founder and CEO Jacob Fortinsky claimed prediction market users have a 10-times-greater chance of long-term profit compared to sportsbook bettors. Citizens Equity Research analyst Jordan Bender disputed that: median user return on prediction markets was -8% versus -5% at sportsbooks.
