Novig Sues New York a Day After Launching in 47 States

Novig sued New York officials in Manhattan federal court on Aug. 5, one day after opening its sports prediction market to traders in 47 states.

The complaint was filed by Ludlow Exchange, the company's federally registered exchange unit. It seeks a preliminary injunction barring the state from applying its gambling laws to Novig's sports event contracts, binary derivatives that pay out on the result of a game.

New York sued Kalshi on July 31 and put its minimum damages at $36 billion. Novig went live in the state anyway, then asked a federal judge for cover before any enforcement reached it.

Novig Bets Its Launch on Federal Preemption

The Commodity Futures Trading Commission (CFTC) made Ludlow Exchange a designated contract market on June 16, the federal license that lets an exchange list contracts nationwide. Ludlow had applied on Jan. 21.

Novig's argument is the one Kalshi has run in courts nationwide: the Commodity Exchange Act gives the CFTC exclusive jurisdiction over event contracts, leaving state gambling law preempted. It has not worked in Manhattan so far. A federal judge there denied Kalshi the same relief in July, according to multiple industry reports.

A Colorado Sportsbook Returns as an Exchange

Novig began in 2021 as a peer-to-peer sportsbook founded by Jacob Fortinsky and Kelechi Ukah. It won a Colorado license in 2023 and handed it back in April 2024, with Fortinsky saying state betting rules left little room for peer-to-peer trading.

Novig has raised more than $105 million, including a $75 million round led by Pantera Capital in February, multiple outlets have reported. Cumulative volume has passed $6 billion, the company said on Aug. 4.

Trading is open everywhere except Arizona, Michigan and Nevada, and eligibility follows a trader's physical location rather than residence.

On July 30, Novig became the exclusive prediction market partner of the New York Mets, the first such deal with a Major League Baseball club. Its branding now sits inside Citi Field while its lawyers argue the state cannot touch the product. No hearing date on the injunction motion has been set.