Key Highlights
Novig filed a lawsuit against Wisconsin Attorney General Josh Kaul and gaming administrator John Dillett to prevent enforcement actions.
The company claims federal CFTC jurisdiction applies to its sports event contracts, exempting them from state gambling regulations.
Wisconsin previously initiated legal proceedings against Kalshi, Polymarket, Robinhood, Crypto.com and Coinbase regarding comparable sports contracts.
The CFTC granted Ludlow Exchange, Novig’s subsidiary, designated contract market authorization on June 16.
Novig has initiated legal action against officials in five states since early August, including New York, New Mexico, Massachusetts and Washington.
The prediction market operator Novig has initiated legal proceedings against Wisconsin Attorney General Josh Kaul and gaming administrator John Dillett, challenging the state’s regulatory stance on sports event contracts. The lawsuit, filed Friday, represents a preemptive move to secure federal court protection ahead of potential state enforcement measures targeting the platform.
Federal Court Battle Begins in Wisconsin
Ludlow Exchange LLC, Novig’s operational subsidiary managing the exchange, submitted a comprehensive 45-page complaint to the U.S. District Court for the Western District of Wisconsin. The platform had launched sports event contract offerings to Wisconsin residents just days before filing the lawsuit.
The legal action stems from anticipated state intervention, given Wisconsin’s April lawsuits against major platforms including Kalshi, Polymarket, Robinhood, Crypto.com and Coinbase. These existing cases allege that sports event contracts breach state gambling statutes and constitute a public nuisance. Novig avoided inclusion in those initial legal proceedings.
State officials in Wisconsin had yet to issue a response to Novig’s legal filing as of press time. Requests for comment to Novig, the state Department of Administration, and the Department of Justice went unanswered.
The core of Novig’s legal argument centers on classifying its sports contracts as swaps regulated by the Commodity Exchange Act. According to the company, the Commodity Futures Trading Commission holds exclusive regulatory jurisdiction over these financial instruments, thereby preventing Wisconsin from applying state gambling legislation.
The CFTC granted Ludlow Exchange designated contract market status on June 16. Wisconsin maintains that sports outcome contracts constitute gambling under state statutes regardless of federal platform credentials. This position gained support when a federal judge rejected the CFTC’s preliminary injunction request in July.
Multi-State Legal Strategy Unfolds
The Wisconsin lawsuit marks Novig’s fifth state-level legal challenge since initiating its campaign on August 4. The prediction market operator has pursued similar litigation in New York, New Mexico, Massachusetts and Washington while expanding sports contract availability nationwide.
The company transitioned from operating under a Colorado sports betting license to pursuing federal market designation after withdrawing from Colorado in 2024. Novig enforces a minimum age requirement of 21 years for all users and restricts its offerings exclusively to sports-related contracts, avoiding political events, international developments, or entertainment markets.
In a significant industry development, Novig established an exclusive multiyear partnership with the New York Mets. This agreement grants the company advertising presence at Citi Field, visibility during team broadcasts and access to official MLB data. The collaboration represents a historic milestone as the Mets became the first Major League Baseball franchise to partner officially with a prediction market operator.
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