Federal judge rules Novig's sports contracts are not swaps, denies injunction
A federal judge in New York denied Novig's bid for a preliminary injunction on Monday. The court ruled that Novig's sports event contracts do not qualify as swaps under the Commodity Exchange Act. That finding lets New York enforce its gambling laws against the platform's sports betting products. Novig cannot block state authorities from pursuing enforcement actions for now. Judge McMahon issued the ruling. The decision blocks Novig from operating its sports prediction market in New York.
Novig loses the federal preemption shield that Kalshi and Coinbase just saw stripped by the Second Circuit. The same non-swap finding now exposes Novig to state gambling enforcement without an injunction pause. Platform operators must budget for state-level defense even when they hold CFTC registration. New York can pursue Novig while parallel federal appeals drag on.
The ruling deepens the pattern where federal courts refuse to block state action against event-contract platforms. Every operator must now assume state courts will treat sports contracts as gambling products unless and until the CFTC's swap rulemaking finishes. Novig's New York block follows Kalshi's state losses in Ohio, Tennessee, and Louisiana, plus a tribal injunction on California lands. The legal template spreads.
Joins a deepening stack of state and tribal enforcement actions against federally registered platforms that federal courts have refused to preempt, alongside Kalshi's losses in Ohio and Tennessee and the Second Circuit's denial of Kalshi and Coinbase's pause bids.