Prediction market Novig sues Wisconsin AG in latest spat over sports contracts

Quick Take

• Sports-focused prediction market Novig filed a federal lawsuit against Wisconsin Attorney General Josh Kaul and gaming administrator John Dillett in anticipation of being forced by the state to stop offering event contracts on sports.
• The firm began offering contracts to Wisconsin residents just one week before filing the suit and is seeking expedited consideration of a preliminary injunction.
• Novig, which recently announced a partnership with the New York Mets, has sued officials in five states including Wisconsin since Aug. 4.

Sports-focused prediction market platform Novig sued Wisconsin Attorney General Josh Kaul and state gaming administrator John Dillett on Friday in anticipation of the state suing it, as it had sued other prediction markets over similar offerings in April.

Ludlow Exchange LLC, the Novig subsidiary that operates its exchange, filed the 45-page complaint in the U.S. District Court for the Western District of Wisconsin. Novig began offering event contracts to Wisconsin customers the previous week, according to the filing.

Novig argues that enforcement is likely imminent because of Wisconsin's prior lawsuits against the other prediction market platforms. Unlike Kalshi and Polymarket, however, Novig offers exclusively sports-related contracts, rejecting event contracts on international news or "mention markets."

Novig also requires users to be at least 21 years old. "There's a broader reckoning coming with the younger traders," Novig CEO and co-founder Jacob Fortinsky told WIRED. "That group is particularly susceptible to irresponsible behavior and financial ruin."

Wisconsin officials have not yet responded to Novig's complaint. Novig and the Wisconsin DOA and DOJ did not immediately respond to The Block's request for comment.

A preemptive case

Wisconsin sued Kalshi, Polymarket, Robinhood, Crypto.com and Coinbase in April, as The Block previously reported, alleging their sports-related event contracts violate its commercial gambling ban and create what it called a "public nuisance." Those cases are now pending in the same federal district where Novig filed its complaint.

Novig was not among the April defendants. The Commodity Futures Trading Commission designated Ludlow Exchange as a designated contract market (DCM) on June 16, according to the agency's industry filing.

Like other prediction market operators in state-level fights, Novig argues that its sports contracts are swaps under the Commodity Exchange Act and therefore fall under the CFTC's exclusive jurisdiction. Wisconsin contends that contracts tied to sports outcomes remain bets under state law regardless of the exchange's federal status.

The CFTC has advanced the same preemption theory in its own lawsuit against Wisconsin officials. A federal judge denied the agency's preliminary injunction request in July, finding that it had not shown it was likely to prevail, Bloomberg Law reported. The case remains pending.

Novig expands offerings and lawsuits

Wisconsin is the fifth state whose officials Novig has sued since Aug. 4. The company filed cases in New York, New Mexico, Massachusetts and Washington before filing the Wisconsin lawsuit.

The filings amount to a preemptive legal campaign as Novig expands nationwide. The complaint says the company previously tried state regulation, operating under a Colorado sports betting license before withdrawing in 2024 and pursuing federal designation.

Novig is also notable for having signed an exclusive, multiyear partnership with the New York Mets. The Mets are the first Major League Baseball club to partner directly with a prediction market platform, according to Front Office Sports. The agreement includes Citi Field and broadcast advertising and allows Novig to use official MLB data.

This content is provided for general informational purposes only and doesn't constitute financial, investment, legal, or tax advice. Any events, rewards, online promotions, or related information mentioned herein should not be considered a recommendation, solicitation, or invitation to purchase, sell, trade, or otherwise deal in any crypto assets. Crypto assets are highly volatile and may result in loss. The availability of WEEX services, products, and related events may vary by region. You are responsible for ensuring that your participation is in accordance with applicable local laws and regulations.