Novig launched its federally regulated prediction market Tuesday, entering a crowded and increasingly contentious industry with a sports-exclusive platform that aims to operate in all 50 states.
The launch represents the latest evolution for a company that previously operated as a betting exchange in New Jersey and Colorado before shifting to a dual-currency sweepstakes model. That platform has now been shuttered as Novig moves into the federally regulated prediction market space.
The Commodity Futures Trading Commission designated Novig's Ludlow Exchange as a designated contract market in June, officially clearing the company to operate a federally regulated exchange. The platform limits trading to customers 21 and older.
Last week, Novig also became the first prediction market operator to partner with a Major League Baseball franchise, signing a multiyear agreement with the New York Mets.
The two developments provide Novig with federal regulatory approval and a significant foothold in the nation's largest media market as it attempts to compete with Kalshi, Polymarket, Robinhood, ProphetX and Underdog, along with prediction platforms operated by DraftKings, FanDuel and Fanatics.
Novig touted its Designated Contract Market (DCM) launch as opening the door to "instant live trading, deeper liquidity, stronger market quality and expanded payment options."
Novig co-founder and CEO Jacob Fortinsky remains undaunted by the competition — or the legal uncertainty hanging over sports event contracts.
"We've also proven our ability to pivot from a regulatory perspective a couple times successfully and to do that swiftly and to understand the core user better than our competitors," Fortinsky told RotoWire earlier this year. "When we were launching our sweeps product, many people said to me, 'You're delusional if you think you're going to catch up to X company or Y company.' And four or five months later, we were significantly larger than those companies."
Fortinsky founded Novig with Kelechi Ukah in 2021 while both were students at Harvard. The company has since raised more than $105 million and carries a reported $500 million valuation.
Novig has handled $6 billion in cumulative trading volume.
The Long And Winding Road
Novig's path to a federally regulated exchange was anything but direct.
After its original betting exchange operated in only two states, Novig relaunched under a sweepstakes framework that allowed customers to participate through a dual-currency system. But that model encountered mounting opposition as states including New York, California and New Jersey moved to prohibit dual-currency sweepstakes platforms.
The regulatory restrictions effectively closed off Novig's interim model and accelerated its pivot toward the federal prediction market framework.
"Federal oversight allows us to scale within a framework built on trust, transparency and fairness," Fortinsky said following the CFTC's approval of Ludlow Exchange.
That position mirrors Fortinsky's longstanding criticism of the state-by-state sports betting system created after the Supreme Court overturned the Professional and Amateur Sports Protection Act in 2018.
"The technology isn't going anywhere," Fortinsky told RotoWire. "On two extremes, you have people that say this should be entirely unregulated, and others who say this should be entirely prohibited. We support reasonable rational regulation around the prediction market space. And we strongly believe it's better for trading on sports event contracts to be regulated at the federal level rather than the state level."
Federal Regulation 'Better For Consumers'
Novig co-founders Jacob Fortinsky and Kelechi Ukah.
Whether federal law supersedes state gaming authority remains at the center of lawsuits involving prediction market operators, state regulators and attorneys general across the country. States maintain that sports event contracts constitute gambling and must be licensed locally. The platforms argue those contracts are federally regulated commodities under the exclusive jurisdiction of the CFTC.
Novig enters the market as that fight continues to intensify. Fortinsky, however, argues a single federal framework offers operators and consumers more consistency than a patchwork of state laws.
"It's better for consumers, it's better for the industry, it's better for innovation and technology," he said. "And so I think it's a shame that there are people that are trying to send us back to the states."
Novig's relationship with MLB could strengthen its credibility as the company attempts to distinguish itself from other platforms.
MLB and the CFTC signed a memorandum of understanding earlier this year that calls for the two sides to cooperate and exchange information related to sports integrity and prediction markets. Novig subsequently became an MLB Authorized Prediction Market, placing the exchange within the league's integrity program.
That status includes market monitoring, reporting protocols and restrictions on contracts MLB believes could threaten the integrity of its games.
Meet The Mets - Novig Already Did
The Mets agreement moves the relationship beyond regulatory cooperation and into a commercial partnership. Novig will receive exposure through Citi Field signage, broadcast-visible branding, branded in-game features and original digital content.
"That's the biggest story of the year," Fortinsky said of MLB's engagement with federally regulated prediction markets. "For a while, you had the big sports leagues all saying, 'We're not going to touch prediction markets. We're firmly in bed with the OSB operators.' Now, they're changing their tune and they're becoming more comfortable."
Fortinsky believes Novig's other major competitive advantage is its proprietary technology. While several prediction market platforms rely on exchanges or infrastructure operated by third parties, Novig owns its technology stack. That eliminates revenue-sharing requirements and gives the company greater control over pricing, market offerings and product development.
Novig plans to remain focused exclusively on sports while offering player props, parlays and correlated multi-leg markets. The exchange launched commission-free, although Fortinsky's "at the moment" qualification leaves open the possibility of future transaction fees.
"It just comes down to having the best customer experience, having the most efficient markets," Fortinsky said. "Ultimately, I think it comes down to getting a similar, but better user experience and far better prices."
