Novig, a no-commission, peer-to-peer sports prediction market platform, has reportedly been eyed for purchase by “multiple suitors,” including prediction market leaders Kalshi and Polymarket, according to a recent report from Front Office Sports.
The report, citing an unnamed source, says Novig is not actively seeking a sale. It’s unclear if any formal offers have been made, according to FOS. A Kalshi spokesperson told the outlet that the company has “no plans for any acquisitions at the moment.” Novig and Polymarket declined to comment.
The new report comes after Novig announced the close of an $18 million Series A funding round, led by venture capital firm Forerunner and including previous investors like startup accelerator Y Combinator, a crucial early investor in Kalshi.
Novig offers expansive sports markets using sweepstakes model
CEO and co-founder Jacob Fortinsky calls Novig “the #1 sports prediction market in the US.” The platform launched in its current form in September of 2024 and, according to the press release announcing the latest funding round, it has since seen a 50x increase in monthly trading volume.
Rather than operating as a real money prediction exchange, Novig uses a sweepstakes model, whereby users can trade with two forms of virtual currency. Novig Coins can be purchased and used to trade just for fun, while Novig Cash, available for free through promotions and with the purchase of Coins, can be redeemed for cash prizes. Novig only has sports markets and its app resembles a traditional online sportsbook or sports betting exchange, with American odds shown and a wide range of trading options, including on moneylines, point spreads and totals, as well as player props and parlays.
In August, Fortinsky told InGame that Novig intended to seek approval from the Commodity Futures Trading Commission (CFTC) to offer its sports event contracts. The CFTC has yet to approve a sports-only prediction market platform as a Designated Contract Market (DCM). The similar-minded sports prediction exchange RSBIX currently has a DCM application pending with the CFTC.
Because it operates as a sweepstakes exchange, Novig is unavailable in several states, most recently exiting New Jersey after the state passed an online sweepstakes gaming ban. Novig seems likely to also leave California if Gov. Gavin Newsom signs a similar sweepstakes prohibition there.
If Novig were to earn CFTC approval as a DCM, it would be able to abandon the sweepstakes model and offer real-money trading on sports event outcomes in all 50 states. But a Novig filing for DCM status has yet to appear in the CFTC portal and approval could take months, if not years.
Novig attractive acquisition prospect for its sports-minded user base
The news that Kalshi and Polymarket, the two largest CFTC-approved prediction platforms, might have interest in buying Novig comes as both companies are experiencing substantial growth. The U.S. prediction platform Kalshi has been attracting blockbuster trading volume, particularly with its NFL and college football markets. Global prediction platform Polymarket, meanwhile, acquired CFTC-approved exchange QCX this summer, setting the stage for an imminent return to the U.S.
Kalshi and Polymarket could be looking at a Novig acquisition as a way to extract Novig’s sports-minded user base and also onboard some of Novig’s staff with experience in sports market trading. While Novig hasn’t reported how many users it has, the 50x trading volume increase over the past year and self-reported $2 billion+ in annualized Novig Cash volume suggests fairly substantial engagement. Kalshi could channel those users to further enhance trading volume with its proven sports markets, while Polymarket could be looking for ways to supercharge its sports event contracts upon its U.S. return, which is expected any time now.
The leading CFTC-approved prediction platforms could also be looking at a Novig acquisition as a way to reduce market competition.
Was recent funding raise a bridge to potential acquisition?
If Novig was interested in testing the acquisition waters, its recent $18 million funding may have been an unofficial bridge round, providing short-term financing while waiting to close on an acquisition deal. Selling to Polymarket, Kalshi or another company could provide a profitable exit opportunity for investors, particularly in light of recent increased regulatory scrutiny of sweepstakes gaming.
The micro-betting technology provider Simplebet, which contracted with several online sports betting operators to capitalize on the rising popularity of live, in-game betting, completed a nearly $10 million debt financing funding round in late 2023. That could have been to clear some debt in the interest of facilitating an acquisition, as several months later DraftKings purchased Simplebet for an estimated $195 million to bring its technology entirely in-house.
The reported interest in Novig from Kalshi and Polymarket could signal the beginning of more attempts to acquire similar sweepstakes-based sports betting exchanges. If the trend takes off, peer-to-peer betting platforms like ProphetX, Bettor Edge and Rebet could be open to acquisition offers, particularly as the market for sweepstakes gaming continues to shrink due to state prohibitions.
The summer of prediction market partnerships and acquisitions
As companies look to better position themselves to take advantage of increased consumer interest and what appears to be a more permissive regulatory climate for prediction markets in 2025, there has been a flurry of acquisition and partnership activity in the industry, a lot of which has been related to the lucrative potential of sports prediction markets.
- Polymarket acquired the CFTC-approved exchange QCX in July, facilitating its return to the U.S. market.
- Sports betting giant DraftKings has explored acquiring the CFTC-approved Railbird Exchange, according to reports over the summer.
- In August, another online sports betting leader, FanDuel, announced a partnership with the CME Group, which has DCM status to offer prediction markets nationwide. FanDuel says it will initially focus on non-sports prediction markets.
- In early September, DFS operator Underdog announced it was partnering with Crypto.com’s CFTC-approved CDNA to offer sports prediction markets in select markets.
- Fellow DFS operator PrizePicks signaled it may be seeking a DCM partnership to offer prediction markets after it announced it had successfully registered as a Futures Commission Merchant (FCM) with the National Futures Association. FCMs are cleared to offer event contract trading in partnership with a DCM.
