Judge denies Novig's bid to block New York gambling law, says its sports contracts are not swaps, The Block reports

A federal judge in New York has refused to shield the sports prediction market Novig from the state's gambling laws, ruling that its sports event contracts are not swaps under federal commodities law, The Block reported on November 11. US District Judge Colleen McMahon of the Southern District of New York denied the company's request for a preliminary injunction, a court order that applies while a case is being decided, in a filing dated Tuesday, November 10, 2026, according to the outlet.

What the Novig ruling says

Novig's legal entity, Ludlow Exchange LLC, was designated a contract market by the Commodity Futures Trading Commission (CFTC) in June 2026 and began offering sports event contracts to customers in New York in August, The Block reported. On August 5 it sued New York Attorney General Letitia James and officials of the state gaming commission, arguing that federal law overrides state regulation because the CFTC has exclusive jurisdiction over event contracts that qualify as swaps, according to the report.

An event contract pays out depending on whether a specified event happens. Whether such a contract is a swap matters to Novig's case because its argument that federal law displaces state gambling law rests on the CFTC's authority over swaps.

The judge rejected the argument. "The Court concludes that Novig's contracts do not depend on events or contingencies that are 'associated with a potential financial, economic, or commercial consequence' within the meaning of § 1a(47)(A)(ii). Accordingly, they are not 'swaps' under the CEA," the filing said, as quoted by The Block. CEA stands for the Commodity Exchange Act.

The judge concluded that New York may apply its gambling and sports-wagering laws to Novig, which lets the state require the company to get a gambling license or stop listing sports contracts, The Block reported. The contracts "bear more than a passing resemblance to sports betting," the judge wrote, as quoted by the outlet.

We have not read the court filing itself. Two gambling-industry outlets, Gaming.net and Casino.org, separately reported the denial. According to Gaming.net, the judge found that Novig had not shown it was likely to win on the merits and did not go on to the other tests for an injunction. The Block said it had asked Novig for comment.

Why it matters

The question of who regulates prediction markets, the CFTC or the states, is before courts in several states. The Block noted that another New York federal judge denied a similar request from Kalshi earlier in 2026 and that Novig is litigating the same issue in other states. Sports-betting lawyer Daniel Wallach wrote on X that federal courts in the Second Circuit have issued 10 rulings in sports prediction-market cases and that all favored the states, according to the report.

Kalshi is also the subject of a report that the CFTC warned it of possible charges over product notifications, and it has asked a court for permission to back the agency in a separate court fight over perpetual futures on stocks.

What it could mean for users

In our assessment, the ruling raises the chance that sports contracts on prediction markets become unavailable in some states while the cases continue; it does not decide the legal question for the country, and other courts may rule differently. The decision as described concerns sports contracts, not contracts on economic or political events.