Novig has added Massachusetts, New Mexico and Washington to its legal fight over sports prediction markets, filing three new federal lawsuits only days after taking New York regulators to court. The new cases bring the Novig total to four during its first week of operation.
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The three latest lawsuits put Novig into jurisdictions that have already taken action against prediction market companies. Sports betting and gaming lawyer Daniel Wallach said all four states targeted by Novig have pursued temporary restraining orders or preliminary injunctions involving federally regulated derivatives exchanges.
Novig bases the cases on federal preemption. The operator argues that the Commodity Exchange Act gives the Commodity Futures Trading Commission exclusive authority over event contracts traded on federally regulated markets. State regulators, meanwhile, have argued that sports contracts can fall under their gambling laws.
New York remains the most advanced Novig case. As iGaming.org previously reported, Novig sued state officials one day after launching and asked a federal court to prevent possible enforcement.
“Despite the CFTC’s exclusive jurisdiction over event contracts, Novig expects that New York will imminently bring an enforcement action against it along the same lines as the other lawsuits that Defendants have already brought against similarly situated parties,” Novig’s attorneys wrote. “New York’s threatened enforcement of its laws is preempted several times over.”
Wallach identified New York as the case to watch because Novig has requested a preliminary injunction there. Massachusetts and Washington have already produced court decisions favorable to state regulators in separate prediction market disputes, adding another hurdle for the operator.