Novig Sues New York Over Its Sports Prediction Markets

Novig has taken New York to federal court, and it did so before the state made a single move against it. The company filed suit on August 8, one day after it launched its sports prediction markets across 47 states. The complaint names Attorney General Letitia James along with members of the New York State Gaming Commission. Novig wants a judge to stop the state from applying its gambling laws to event contracts.

The filing landed in the U.S. District Court for the Southern District of New York. Novig is seeking a preliminary injunction that would hold state enforcement off while the case runs its course. Its central claim is that the Commodity Futures Trading Commission holds exclusive jurisdiction over event contracts. Under that reading, state gambling statutes simply have no room to operate.

Novig Takes Its Prediction Markets to Court First

Most operators wait for a cease and desist before they call in the lawyers. Novig did the reverse. The company secured Designated Contract Market status from the CFTC on June 16, then rolled its sports event contracts out nationwide. The lawsuit followed one day later.

That sequencing was deliberate. New York has already sued KalshiEX and Coinbase Financial Markets under Executive Law § 63(12) over the same category of product. Novig argues that the state will come for it next, and soon. So instead of waiting for an enforcement letter to arrive, it asked a court to rule New York out of bounds in advance.

The company also drew a hard line between its platform and a traditional sportsbook. Novig runs its prediction markets on federally regulated event contracts rather than fixed-odds wagering. It enforces a 21+ age requirement across the platform. Both points feature prominently in how the company frames its compliance position.

New York Has Not Been Subtle About Its Position

The state has become one of the toughest jurisdictions in the country on this question. Governor Kathy Hochul and James moved against Kalshi after that company sought protection from state enforcement. Hochul said the platform had chosen to ignore gaming laws that protect consumers, fund public services, and keep every operator on equal terms. She added that “no company is above the law.”

Kalshi’s own attempt to shield itself did not work. Judge Analisa Torres denied its preliminary injunction request in early July, in the very district where Novig has now filed. That ruling sits squarely in the path of the new motion. Novig is asking the Southern District for relief that one of its judges recently declined to grant a company making a near-identical argument.

The preemption question is the whole fight. Companies running prediction markets say federal derivatives law governs their contracts and leaves states nothing to enforce. States counter that a wager on a football game remains a wager regardless of the wrapper around it. Courts have split, and no appellate ruling has settled it.

From Colorado Sportsbook to a Nationwide Platform

Novig has changed shape more than once. It launched as a state-licensed sportsbook in Colorado in 2024. From there it shifted to a sweepstakes model before moving into prediction markets. Each pivot carried it further from state licensing and closer to federal oversight. The current structure is the furthest point on that path.

The scale numbers matter here too. Novig says its prediction markets have already processed more than $6 billion in trading volume. Rivals list contracts on politics, economics, and entertainment, but Novig trades sports and nothing else. That focus makes the comparison to a sportsbook easier for regulators to draw, which is precisely why the company keeps stressing its federal status.

CEO Jacob Fortinsky said sports fans have long had limited ways to engage with the markets they know best. He described the platform as built around trust, transparency, and responsible participation. Compliance spending, market surveillance, and the 21+ requirement all sit inside that pitch. It reads as much like an argument aimed at regulators as a message aimed at traders.

What the Case Could Actually Decide

A ruling here would carry weight well beyond one company. New York runs one of the largest regulated sports betting markets in the United States. Licensed operators there pay tax on every dollar they take. Contracts traded outside that system sit outside that tax base entirely, and states have noticed.

For now Novig operates in 47 states while it waits. If the court grants the injunction, other federally registered platforms will follow the same playbook into other hostile jurisdictions. If it refuses, New York gains a second win in the same courthouse and a stronger hand for the enforcement action it has not yet filed.

The industry is watching the docket closely, because the answer determines who gets to write the rules. Novig has bet its prediction markets business on the federal side of that line. Nobody knows yet if the court agrees.