Novig New York injunction denied: a federal judge finds its sports contracts are not swaps, leaving the state free to require a license
Novig sued New York Attorney General Letitia James and officials of the New York State Gaming Commission on August 5, 2026, according to The Block, days after it began offering sports event contracts nationwide. Legal Sports Report reported at the time that Novig's lawyers argued its federal regulation by the Commodity Futures Trading Commission preempts state law and said they expected New York to act against the platform. The CFTC designated Ludlow Exchange as a contract market in June 2026, according to The Block.
What the market is pricing
Neither Kalshi nor Polymarket lists a market on the outcome of the Novig case, and BetG8 could not re-read prediction market prices in this run, so no venue prices are shown. The closest live prices are listed betting and trading stocks whose businesses are exposed to how courts treat sports event contracts. Quotes are from Twelve Data, read at 16:47 UTC on November 12, 2026, during the US session:
| Stock, 16:47 UTC Nov 12 | Price | Change on day |
|---|---|---|
| DraftKings (DKNG) | $19.20 | -2.3% |
| Flutter Entertainment (FLUT) | $84.09 | -1.6% |
| Robinhood Markets (HOOD) | $83.75 | -1.0% |
These are market prices, not predictions, and a single day's move in a large company's stock reflects many factors besides one district court order. No causal link to the ruling is implied.
What the judge found
The central question was whether Novig's sports contracts are swaps. Novig argued that the CFTC has exclusive jurisdiction over event contracts because they are swaps under the Commodity Exchange Act, which would put them beyond state gambling law. According to The Block, Judge McMahon disagreed, writing that the contracts "bear more than a passing resemblance to sports betting" and do not depend on events tied to a "potential financial, economic, or commercial consequence," language from the statute's swap definition. Because she found the contracts are not swaps, Novig's preemption argument did not succeed at this stage, according to the reports.
A preliminary injunction is an early remedy. To obtain one, a company generally must show it is likely to win on the merits, among other factors. Denial means the court did not find that showing made; the case itself continues unless the parties or the court resolve it another way.
The wider New York record
The order follows a July 2026 decision in which another New York federal judge denied Kalshi's request to block state authorities from enforcing gambling laws against its prediction market, The Block reported. Gaming attorney Daniel Wallach wrote on X that federal courts in the Second Circuit have now issued 10 rulings in sports prediction market litigation, all favoring the states, according to The Block. That count is Wallach's; BetG8 has not independently tallied the rulings.
Wallach also wrote that the attorney general "could literally cross the street and file a state-court civil enforcement action against Novig," according to The Block. No such action had been reported as of this writing. The Block said it contacted Novig for comment, and its report did not include a response. Novig is litigating the same question in several other states, according to The Block, and federal courts elsewhere have not all reached the same conclusions on preemption.
What to watch next
Whether Novig appeals the denial to the Second Circuit, and whether New York's attorney general or Gaming Commission takes enforcement steps, either through a license demand or a civil action. Also watch how the CFTC responds: InGame reported this week that CFTC Chair Michael Selig has classified sports event contracts as swaps, a position that sits in tension with the court's reading at this stage. Our guide to CFTC self-certification explains how these contracts reach the market.
Method and limits
This article relies on reporting by The Block and ChainCatcher (republished by KuCoin News) on the November 10 order and on Legal Sports Report's August coverage of the original complaint; BetG8 did not review the full order text. Legal characterizations are attributed to those sources. Stock quotes are from Twelve Data at 16:47 UTC on November 12, 2026. Nothing here is legal advice, and BetG8 takes no position on the outcome of the litigation.
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Frequently asked questions
Did a judge rule against Novig in New York?
Yes, at a preliminary stage. Judge Colleen McMahon of the Southern District of New York denied Novig's request for a preliminary injunction against New York officials, according to The Block. The case is not over.
Why did the judge say Novig's contracts are not swaps?
According to The Block, she found they do not depend on events with a potential financial, economic or commercial consequence, as the Commodity Exchange Act swap definition requires, and that they bear more than a passing resemblance to sports betting.
What can New York do now?
According to The Block and ChainCatcher, New York can require Novig to obtain a state gambling license or prohibit it from listing and trading sports event contracts. No enforcement action had been reported as of November 12, 2026.
Sources
- The Block, New York judge denies Novig injunction bid
- ChainCatcher via KuCoin News, NY federal court denies Novig's preliminary injunction request
- Legal Sports Report, Novig launches prediction markets, then promptly sues New York
- InGame, House subcommittee hearing on sports betting and college
- Twelve Data, DKNG, FLUT, HOOD quotes, read 16:47 UTC, November 12, 2026
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