Novig has secured a Designated Contract Market designation from the Commodity Futures Trading Commission, clearing the company to list and trade sports event contracts across all 50 US states under federal oversight – a development that places it inside the same regulatory framework its rivals have been fighting to defend while simultaneously exposing it to the state-level enforcement actions that have trailed every CFTC-registered prediction market operator to date.
The DCM designation, granted through Novig’s separately incorporated exchange entity Ludlow Exchange LLC, followed an application filed with the CFTC in January 2026. Industry observers noted the approval – arriving in mid-June 2026, roughly five months after filing – as one of the faster DCM designations in recent CFTC history. The authorization allows Novig to operate without simultaneously registering as a Derivatives Clearing Organization, at least at this stage, distinguishing its initial structure from some competitors that have pursued dual registration.
Novig’s platform operates on a peer-to-peer model in which participants trade directly against one another rather than against a house book, with pricing driven by real-time supply and demand. Prior to securing the DCM designation, the company ran a sweepstakes-based sports trading exchange available in 36 states and Washington, D.C., reporting more than 100,000 active traders and an annualized volume of $4 billion in 2025 – a figure that represented a more than 10x increase over the prior year. Novig has since reported cumulative trading volume exceeding $5 billion and raised $75 million in a Series B round in February, led by Pantera Capital, bringing total funding to over $105 million.
The regulatory terrain Novig is entering has been contested at every level. The CFTC has taken an increasingly aggressive posture in asserting federal preemption of state gambling laws as applied to event contracts, filing suit against New Mexico alongside the Department of Justice to block the state from applying its gambling statutes to contracts traded on CFTC-registered DCMs. That litigation reflects the core jurisdictional dispute: state gaming regulators contend that sports event contracts are sports betting subject to state licensing requirements, while CFTC-registered operators and the commission itself maintain that federal designation under the Commodity Exchange Act supersedes state law.
The conflict has generated sustained enforcement activity against Novig’s closest competitors. Nevada moved to hold Kalshi in contempt after the platform allegedly failed to comply with geofencing obligations imposed by a state court injunction, and a Nevada district court issued a preliminary injunction blocking Polymarket from operating in the state after rejecting the platform’s federal preemption argument at both the TRO and preliminary injunction stages. CFTC registration has not, in practice, shielded either platform from state court orders, and legal analysts note that Novig’s DCM designation will not automatically insulate it from similar actions once it begins migrating users out of its sweepstakes product and into the regulated exchange.
Novig CEO and co-founder Jacob Fortinsky said: “By aligning incentives with users and removing the structural disadvantages of legacy betting platforms, we’re building a fundamentally different model where participants aren’t playing against the house, but operating within a fair and transparent market.” Fortinsky framed the approval as a structural inflection point for the sector, stating that sports event contracts should be treated as a legitimate asset class and that the company is “building the financial market for sports, specifically designed for sports traders by sports traders.”
Novig’s DCM designation arrived days after ProphetX received both DCM and DCO approvals in June 2026, intensifying competition for liquidity in a federally regulated sports prediction market segment that also includes Kalshi, Polymarket, and DraftKings’ planned DKeX exchange. The open question industry observers are now tracking is how quickly Novig converts its existing user base into the CFTC-regulated exchange, and whether state regulators in Nevada or elsewhere move against the platform before the preemption question is resolved at the appellate level.
Source: Intergame Online
Petra Vanhoof has spent the better part of a decade following the shifting tides of gambling regulation across Europe and beyond. She came up through the compliance side of the industry before pivoting to writing, which gives her a grounded, no-nonsense perspective on the rules, loopholes, and political maneuvering that shape how operators actually do business. She is particularly drawn to the gap between what regulators say and what the market ends up doing in response.