Novig sues Wisconsin AG, the fifth state in 12 days over sports-contract legality

Novig sued Wisconsin Attorney General Josh Kaul and state gaming administrator John Dillett on Friday, asking a federal court to block the state from treating its sports-event contracts as illegal bets. The 45-page complaint landed in the U.S. District Court for the Western District of Wisconsin. It is the fifth state-level suit the prediction-market operator has filed since Aug. 4, following earlier actions in New York, New Mexico, Massachusetts, and Washington.

The company began offering event contracts to Wisconsin customers the week before filing, according to The Block. It wants expedited consideration of a preliminary injunction.

The legal theory mirrors the one the Commodity Futures Trading Commission pressed against Wisconsin and lost in July. Sports-event contracts qualify as swaps under the Commodity Exchange Act, the argument goes, placing them under the CFTC’s exclusive jurisdiction and beyond the reach of state gambling law. Wisconsin officials, Kaul included, maintain that contracts tied to sports outcomes remain bets under state law regardless of their federal designation. A federal judge denied the CFTC’s preliminary injunction request last month, finding the agency had not shown it was likely to prevail, per Bloomberg Law. That case remains pending.

The dispute tests a practical question: can state regulators block products that a federal regulator, the CFTC, has already licensed?

The CFTC designated Novig’s operator, Ludlow Exchange LLC, as a designated contract market on June 16, according to the agency. Novig says that designation makes its contracts federally regulated derivatives, not state-regulated gambling. Wisconsin counters that the CEA does not preclude states from enforcing their own criminal statutes against unlicensed betting.

The state is not starting from scratch. In April it sued Kalshi, Polymarket, Robinhood, Crypto.com, and Coinbase, alleging their sports-related event contracts violate its commercial gambling ban and create a “public nuisance,” The Block reported. Those cases sit in the same federal district. Novig was not among the April defendants.

Novig’s product strategy differs from Kalshi’s and Polymarket’s in one respect the company is quick to emphasize. It offers exclusively sports-related contracts, rejecting event contracts on international news or what it calls “mention markets.” Users must be at least 21 years old. The company previously operated under a Colorado sports betting license before withdrawing in 2024 and pursuing federal designation.

That pivot came with a high-profile partnership. Novig signed an exclusive, multiyear deal with the New York Mets, the first MLB club to partner directly with a prediction-market platform, per Front Office Sports. The deal covers Citi Field and broadcast advertising and use of official MLB data.

The Mets deal and the five-state litigation campaign run in parallel. Jacob Fortinsky, Novig’s CEO and co-founder, told WIRED the operator is positioning itself as distinct from competitors whose contracts touch political and geopolitical events. “There’s a broader reckoning coming with the younger traders,” he said. “That group is particularly susceptible to irresponsible behavior and financial ruin.” The remark was framed as a critique of the broader prediction-market sector, not a forecast for Novig’s own legal fights.

Wisconsin officials have not yet responded to the complaint. The Wisconsin Department of Administration and Department of Justice did not immediately respond to a request for comment, according to The Block. What remains unclear is whether the court will treat Novig’s DCM designation as dispositive on the preemption question, the question the CFTC itself has not yet won, or whether Wisconsin’s “public nuisance” theory survives the federal status of the underlying contracts. The earlier state cases against Kalshi and the other platforms have not produced a ruling.