Sweepstakes No More: Novig Applies for DCM License
Sweepstakes sports exchange Novig has applied to become a designated contract market (DCM). If approved, it would join the rapidly growing list of federally regulated prediction market exchanges.
State-regulated sports betting exchanges have been trying to operate under federal regulation. Moving from the state-regulated model frees sportsbooks from state-by-state tax rates, license fees, and industry regulations.
Novig is also moving away from the sweepstakes model. The sweepstakes model offers one free and one paid currency to skirt gambling and finance regulations. It’s how Manifold offered real-money election contracts before Kalshi won its right to offer them in 2024. Two of the largest gaming markets, New York and California, have passed bills banning certain sweepstakes games. Connecticut, Montana, and New Jersey also passed bills targeting illegal sweepstakes games.
Meanwhile, at the federal level, CFTC Chairman Michael Selig has pledged to ease regulations to foster innovation in the derivatives industry.
Loosening prediction market restrictions at the CFTC
While Selig may have taken early steps in “future-proofing” the CFTC, his predecessor, Caroline Pham, made the early decision to allow sports contracts.
On the day that Robinhood agreed to offer Kalshi’s Super Bowl contracts, the CFTC requested additional documentation proving the contracts adhered to CFTC regulations. The CFTC didn’t take action against the exchanges. Instead, sports contracts on game winners, over/unders, and parlays became legal throughout 2025.
Selig’s deference to the courts signaled his intended hands-off approach to event contracts. The CFTC has already rubber-stamped sports contracts, even though it hasn’t been willing to file amicus briefs supporting the exchanges it regulates in lawsuits against state gaming regulators.
Forbes embraces play money
Forbes announced its upcoming product ‘ForbesPredict’ on Friday. ForbesPredict will be a free-money prediction market platform that will be used to boost engagement on its site. It will also serve as an alternative to its online comment section, says the company.
It’s the latest reaction to prediction markets as a source of information. Media companies like CNN and CNBC have secured deals with Kalshi to show markets in stories. Forbes seems to believe it doesn’t need a commercial partnership to enjoy the benefits of integrated prediction markets.