Prediction market platform Novig has filed a federal lawsuit seeking to prevent Wisconsin authorities from applying the state’s gambling laws to its business.
The lawsuit was filed by Novig’s parent company Ludlow Exchange LLC after Novig entered the Wisconsin market earlier this month. The company argues that its sports-based event contracts are not gambling but financial products regulated exclusively by the federal Commodity Futures Trading Commission (CFTC).
The legal challenge follows action by the Wisconsin Department of Justice against other prediction market platforms. In April, the DOJ sued several operators including Kalshi, Polymarket and Coinbase, alleging that their sports-related contracts amounted to illegal online sports betting under state law.
Novig’s lawsuit adds another front to the growing legal battle over how prediction markets should be regulated in the US.
Most recently, Kalshi filed for an emergency injunction seeking federal intervention to prevent Utah from enforcing its state gambling laws.
In New York, the CFTC has exercised emergency authority over Kalshi after the state’s latest legal action against the prediction market exchange raised concerns about disruption to its nationwide event-contract operations.
The CFTC ordered Kalshi to continue operating in accordance with the Commodity Exchange Act’s Core Principles after the exchange notified the regulator of a market emergency.
Meanwhile, the Nevada Gaming Control Board has threatened to fine Kalshi $120,000 per day for failing to geofence local users by an August 12 deadline set by a court.
Earlier this month, a Washington court also ordered Kalshi to restrict its prediction markets. The order requires the company to implement geofencing in two phases.
Criticism of prediction markets extends beyond the US. Earlier this week, the Danish Gambling Authority secured a court order to block Polymarket, adding to growing regulatory scrutiny of the platform across Europe.
In Asia, South Korea recently ordered internet service providers to block access to Polymarket, concluding that the prediction market giant constitutes an illegal gambling service under the country's existing laws.
An Israeli Air Force major could face a breach of trust charge after allegedly using inside information to trade Polymarket contracts linked to strikes in Iran and Yemen
