Prediction market operator Novig has filed a 45-page lawsuit against Wisconsin Attorney General Josh Kaul and state gaming administrator John Dillett, seeking to prevent Wisconsin from applying its gambling laws to sports event contracts traded on the company's federally regulated exchange. According to reports from crypto.news, the lawsuit was filed on August 14 in the U.S. District Court for the Western District of Wisconsin, requesting preliminary and permanent injunctions along with a declaration that federal commodities law preempts Wisconsin statutes when applied to event contracts.
The case centers on the Commodity Exchange Act, which Novig argues provides exclusive federal jurisdiction over its sports contracts. As reported by crypto.news, the company contends that its sports contracts are federally regulated derivatives, with Congress placing transactions on designated contract markets within the Commodity Futures Trading Commission's exclusive jurisdiction. The CFTC formally designated Ludlow Exchange as a designated contract market on June 16, requiring compliance with federal regulations and core principles. Novig began offering the disputed contracts to Wisconsin residents approximately one week before filing the lawsuit.
Wisconsin faces an important adverse precedent at the preliminary stage, having previously sued Kalshi, Polymarket, Crypto.com and intermediaries including Robinhood and Coinbase in April. According to crypto.news, Wisconsin alleged these companies' sports event contracts amounted to unlawful commercial gambling and a public nuisance. The CFTC then sued Wisconsin and requested a federal judge prevent state enforcement, but Judge William Griesbach denied that request on July 28, finding the CFTC had not shown a likelihood of success on its preemption claim.
Wisconsin marks the fifth state targeted in Novig's current legal campaign, following cases against officials in New York, Massachusetts, Washington and New Mexico since August 4. As reported by crypto.news, the lawsuits form part of a wider federal-state battle over who controls sports prediction markets, with courts reaching different preliminary conclusions and leaving the issue unsettled nationally. Novig has also expanded commercially, announcing a multiyear partnership with the New York Mets on July 30, naming itself the club's exclusive official prediction market partner.
According to crypto.news, Novig has requested expedited consideration from the Wisconsin court, claiming the threat of state enforcement creates "imminent and existential" risks to its business. The company argues it could face enforcement under Wisconsin's commercial gambling statutes or withdraw from the market while the case proceeds. As of the latest publicly indexed filings, Wisconsin officials had not yet filed a substantive response and the court had not ruled on Novig's requested injunction. The next major question involves whether the Western District of Wisconsin will distinguish Novig's case from the CFTC's unsuccessful preliminary-injunction bid.
