Prediction market operator Novig has filed a 45-page lawsuit against Wisconsin Attorney General Josh Kaul and state gaming administrator John Dillett in the U.S. District Court for the Western District of Wisconsin, seeking declaratory and injunctive relief that federal commodities law preempts state gambling statutes for its sports event contracts.
The suit, lodged by Ludlow Exchange LLC, which operates as Novig, argues that its sports contracts are federally regulated swaps under the Commodity Exchange Act and therefore fall under the exclusive jurisdiction of the Commodity Futures Trading Commission (CFTC). The CFTC formally designated Ludlow Exchange as a designated contract market on June 16, 2026. Novig began offering event contracts to Wisconsin residents roughly one week before filing the lawsuit and is asking for expedited consideration because it says the threat of state enforcement creates 'imminent and existential' risks to its business.
Wisconsin has already sued Kalshi, Polymarket, Robinhood, Crypto.com and Coinbase since April over sports-related event contracts, alleging they violate commercial gambling laws and constitute a public nuisance. However, a Wisconsin federal judge denied the CFTC's request for a preliminary injunction against state enforcement on July 28, finding the agency had not shown a likelihood of success on its preemption claim. Courts have split: the Third Circuit ruled in April that the Commodity Exchange Act preempted New Jersey gambling law for Kalshi’s sports contracts, while a Nevada court reached an opposite preliminary conclusion in a case involving Crypto.com.
The dispute matters for crypto-linked prediction markets, where volume on Kalshi and Polymarket reached $1.46 billion on August 16 — about 15.4% of total prediction market volume of $9.50 billion, up from $139.8 million a year earlier. Meanwhile, Novig is pursuing a nationwide legal strategy, having sued officials in New York, Massachusetts, Washington and New Mexico since Aug. 4. It also signed a multiyear partnership with the New York Mets on July 30 as the club’s exclusive official prediction market partner.
