Novig has asked a federal judge in the U.S. District Court for the Southern District of New York to stop New York from using its gambling laws against the company’s sports event contract markets, filing the case one day after it said it had launched federally regulated trading in 47 states.
According to SportsBettingDime, Novig filed in the U.S. District Court for the Southern District of New York and sought a preliminary injunction. The article said the Commodity Futures Trading Commission certified Novig as a Designated Contract Market on June 16, and Novig’s lawyers argued that New York was trying to do to Novig what it has already done, or tried to do, to other federally regulated event-contract operators under Executive Law § 63(12).
The company says its sports event contracts fall under the CFTC’s exclusive jurisdiction. If the injunction is granted, New York would be barred from enforcing its gambling and sports betting rules to stop Novig from offering those markets in the state.
The backdrop is New York’s suit against KalshiEX, announced on July 31 by Governor Kathy Hochul and Attorney General Letitia James. The state said Kalshi was running an illegal gambling operation through its prediction-market platform and asked a court to halt the business, impose fines, require forfeiture of illegal gains and order restitution to users.
New York’s complaint said Kalshi’s markets met the legal definition of gambling because the outcomes are uncertain and outside the bettor’s control, and that Kalshi had not obtained a licence from the New York State Gaming Commission. It also said the company offered markets to users aged 18 to 20 even though state law requires mobile sports bettors to be at least 21.
The case also lands amid a wider fight between New York and the Commodity Futures Trading Commission over who regulates prediction markets. On April 24, the CFTC sued New York in the same court to block state gambling laws from being applied to CFTC-registered contract markets, asking for a declaration that federal law gives it exclusive authority over event contracts and for a permanent injunction.
New York said in an April 24 statement that its gambling laws are meant to protect consumers and that it would hold prediction-market platforms accountable when they violate those laws. The CFTC said similar litigation has been brought in Arizona, Connecticut and Illinois, and that it secured a temporary restraining order against state regulation in Arizona.
