Novig has received federal approval to operate as a designated contract market, giving the sports prediction platform a route to launch under Commodity Futures Trading Commission oversight. The approval moves Novig toward a federally regulated exchange model.
The company received designation through Ludlow Exchange LLC. Novig plans to use that status to offer sports event contracts across the United States, expanding a market already facing legal and regulatory disputes.
CFTC approval changes model
Designated contract market status allows an exchange to list and operate futures and event contracts under CFTC rules. For Novig, the approval means it can build a sports prediction market rather than rely only on sportsbook or sweepstakes-style access.
Novig has promoted itself as a peer-to-peer sports trading platform. Its model lets users trade against each other instead of betting against a sportsbook house. Federal approval gives Novig firmer regulatory footing as it prepares to grow. It also moves the company closer to other federally regulated prediction market operators.
Sports contracts face legal fights
Sports prediction markets have grown as companies look to offer event-based trading on game outcomes. Kalshi, Crypto.com and Polymarket have already pushed the category into legal debate.
The main dispute is whether sports event contracts are federally regulated financial products or state-regulated gambling. Prediction market companies argue that their contracts fall under commodities law.
State gambling regulators and casino groups argue that sports contracts look like betting. They also warn that the model can avoid state licensing, taxes and consumer protection rules.
Novig enters crowded field
Novig’s approval comes as investors continue to watch the sports prediction market sector. Earlier this year, the company raised $75 million in Series B funding at a valuation of about $500 million. The funding showed how much capital is moving into prediction markets despite legal uncertainty. Novig will now compete with larger names that already have recognition among traders and sports fans.
Its sports-first focus separates it from broader prediction market platforms. Some rivals offer contracts across politics, economics, entertainment and weather, while Novig is built around sports trading.
Federal rules still taking shape
The CFTC has also been working on rules for event contracts tied to sensitive activities, including sports. Any final framework could affect what platforms can list and how they monitor trading. Novig now has federal exchange status, but the market still faces uncertainty. Sports prediction markets remain under pressure from courts, regulators and state lawmakers.
