Prediction markets operator Novig has sued officials in New York and Massachusetts, opening two federal fights within days of launching its regulated platform.
Novig subsidiary Ludlow Exchange LLC, which the Commodity Futures Trading Commission (CFTC) recently approved, filed the New York case on August 5. It sued Massachusetts officials on August 7.
Both complaints make the same core argument. Novig says the Commodity Exchange Act gives the CFTC exclusive jurisdiction over contracts traded on designated contract markets. It wants federal courts to block state gambling and sports wagering laws from reaching those contracts.
The timing puts Novig directly into the jurisdictional fight already surrounding Kalshi. The CFTC designated Novig as a contract market on June 16; the company began offering its federally regulated event contracts this week.
New York suit comes on the heels of Kalshi attack
Novig’s New York complaint targets Attorney General Letitia James and officials from the New York State Gaming Commission. It seeks declaratory and injunctive relief before the state brings an enforcement action against the exchange.
That concern follows several New York actions against prediction markets. The Gaming Commission sent Kalshi a cease-and-desist order in October 2025.
James then sued Kalshi on July 31, alleging its event contracts violated New York gambling laws. The state action seeks restitution, disgorgement and substantial civil penalties.
Novig also faces an unfavorable ruling already issued in the same federal district. On July 7, Judge Analisa Torres denied Kalshi’s request for a preliminary injunction against New York regulators. She found Kalshi was unlikely to succeed on its federal preemption argument.
Kalshi has appealed. Novig told the court in its lawsuit that its case raises similar legal questions, although Novig has received no New York cease-and-desist demand.
Another preemptive strike in Massachusetts
Novig’s Massachusetts case was filed two days later against Attorney General Andrea Joy Campbell and Massachusetts Gaming Commission officials. The complaint again asks a federal court to prevent state gambling laws from applying to Novig’s CFTC-regulated contracts. Novig also requested expedited consideration of a preliminary injunction.
Massachusetts has already taken stronger action against Kalshi and Polymarket, which sued the state in February. Campbell struck first, suing Kalshi in September 2025 for allegedly offering sports wagering without a state license.
A state court granted Massachusetts a preliminary injunction in January. A February order barred Kalshi from facilitating sports event contracts for people located in Massachusetts.
Novig began offering its event contracts to Massachusetts customers this week. It says similar enforcement against its newly launched exchange is imminent.
The two cases therefore arrive at a formative point for Novig. Its federal designation was meant to support a national exchange rather than another state-by-state sportsbook model.
New York and Massachusetts are testing that structure almost immediately. The courts must now address whether Novig’s CFTC status prevents those states from applying their gambling laws to its sports event contracts, as the same question plays out in court circuits across the US.