Novig has initiated lawsuits against Massachusetts, New Mexico, New York, and Washington shortly after the introduction of its sports event contracts, contesting the jurisdiction of these states to apply gambling regulations to its prediction market activities.
The first lawsuit was filed in New York one day post-launch, with subsequent claims filed in the other three states.
Each of the four states involved in Novig’s lawsuits has sought temporary restraining orders or preliminary injunctions against prediction market entities throughout 2026. Novig asserts in its legal documents that its sports event contracts are solely governed by federal law, specifically through the Commodity Futures Trading Commission (CFTC), thereby escaping state gambling regulations.
The lawsuits request that the courts issue preliminary injunctions to prevent state gambling laws from being enforced against Novig.
Novig’s legal representatives indicated in the New York filing: “In light of the CFTC’s exclusive jurisdiction over event contracts, Novig anticipates that New York will shortly take enforcement action against it in alignment with similar proceedings against others. New York’s proposed enforcement of its statutes is preempted significantly.”
Expert Analysis on the Timing
Daniel Wallach, the founder of Wallach Legal and UNHLaw Sports Wagering, commented in a social media update that Novig’s chances of success in Massachusetts, New York, and Washington appear limited due to recent rulings favoring state regulators. However, he emphasized that this litigation approach could yield strategic advantages: “The likelihood of victory in MA, NY & WA seems bleak given recent court outcomes favoring states, but that might not be the primary goal. Proactive federal lawsuits allow for a 90+ day uninterrupted launch, while providing time for potential appellate adjustments.”
Prospects for success are dim in MA, NY & WA in light of recent PM court rulings favoring states, but that may be besides the point. Preemptive federal suits ensure 90+ day uninterrupted launch while allowing enough time for possible appellate reversals (CA1, 2 & 9 & MSJC). https://t.co/SeHEzRW0Fu
— Daniel Wallach (@WALLACHLEGAL) August 9, 2026
Washington Achieves Injunction Against Kalshi
Washington’s case against prediction markets began before Novig’s legal action. Attorney General Nick Brown initiated a lawsuit against Kalshi in March, achieving a preliminary injunction against the company by late July.
King County Superior Court Judge John McHale determined that the state displayed a credible “likelihood of success on the merits” concerning claims that Kalshi’s event contracts, which include sports offerings, breach the Washington Gambling Act. The injunction, once enacted, will temporarily prevent Kalshi from offering sports event contracts in the state.
New York Sets $36 Billion Demand
The conflict between New York and identified contract markets has been ongoing for approximately a year. The state’s latest action against Kalshi seeks $36 billion in damages related to claims of unauthorized gambling.
Following a denial of Kalshi’s emergency relief request in July, Governor Kathy Hochul and Attorney General Letitia James announced the lawsuit, alleging the platform operates an unlicensed gambling venture within the state.
Hochul stated: “Kalshi has opted to disregard New York’s gaming regulations, which are intended to safeguard consumers, mitigate gambling issues, generate funds for vital public services, and ensure compliance among all companies.”
“This choice entails consequences. Together with Attorney General James, New York is acting to halt this illicit conduct and enforce compliance, because no organization is above the law.”
Massachusetts and New Mexico Join Legal Action
Massachusetts previously filed its own lawsuit against Kalshi last September, claiming the company accepted online sports wagers in the state without obtaining a license or adhering to local betting regulations.
The complaint alleges that Kalshi’s sports event contracts circumvent required consumer protections applicable to licensed entities and that the company has not undergone the Massachusetts Gaming Commission’s evaluation process.
The lawsuit further claims Kalshi allows users aged between 18 and 21 to trade contracts, despite the legal betting age in the state being 21.
In New Mexico, Attorney General Raúl Torrez announced in June that the state Department of Justice had filed suit against Kalshi, Inc. and KalshiEX LLC for allegations of unauthorized sports betting operations.
Torrez remarked: “New Mexico has a well-established and finely balanced system for gaming regulation that protects consumers, ensures accountability, and respects tribal sovereignty.”
“Legal gaming in New Mexico is conducted either through tribal-state gaming agreements or via strict state regulations to maintain integrity and prevent corruption, granting licenses to operators who adequately address issues of compulsive gambling.”
“Kalshi has completely disregarded this framework, offering online sports betting within the state. We are pursuing this lawsuit to uphold the integrity of our laws, our regulatory systems, and crucially, the protection of consumers.”
Following New Mexico’s action, the CFTC filed a lawsuit against the state, pursuing legal clarity on these matters.