Novig sues five states to block gambling laws from hitting CFTC-regulated platform
Novig has sued Wisconsin officials, its fifth state lawsuit since early August, as it challenges state gambling laws that it says cannot apply to its CFTC-approved event contracts. Ludlow Exchange LLC, which operates Novig, holds a CFTC designation as a licensed designated contract market. Novig was denied a temporary restraining order in its New York case by U.S. District Judge Colleen McMahon, who noted the denial carried no merit view. Novig recently launched as a sports-focused prediction market and announced a partnership with the New York Mets.
Novig is testing whether federal courts will accept an offensive preemption strategy. Instead of waiting for state enforcement like Kalshi and Polymarket, it is racing to file declaratory judgment suits before states act. A federal win in any of these five states would give every CFTC-regulated platform a new motion to file at the first state threat.
A loss weakens the entire sector's preemption claim and invites more state lawsuits. Novig's trader contracts face the same geography-dependent validity that already haunts Kalshi's open positions. The merits rulings will stretch across months of briefing, leaving contract status uncertain until then.
Novig's offensive preemption strategy now stretches across five states, joining the defensive battles Kalshi and Polymarket are already fighting in New York, Wisconsin, and Utah.