Judge Rejects Novig Bid to Block New York Gambling Laws, Criticizes CFTC

A federal judge in Manhattan has refused to stop New York from applying its gambling laws to prediction market Novig, ruling that the company’s sports contracts “are sports betting,” according to Bitcoin.com News. The decision rejects Novig’s request for protection from state gambling rules, while also drawing attention to federal regulatory treatment of rival Kalshi.

The judge separately criticized an emergency order from the Commodity Futures Trading Commission shielding Kalshi. The order “smacks of a collusive effort” between the regulator and the company it regulates, the judge said, using unusually pointed language to question the relationship behind that intervention. The supplied report does not describe the evidence underlying that criticism.

The ruling puts the substance of Novig’s sports contracts at the center of the dispute. By describing those contracts as sports betting, the judge rejected the distinction Novig sought to draw for purposes of stopping New York from applying its gambling laws. The available account does not provide the full legal reasoning supporting that conclusion.

The dispute highlights a consequential question for prediction markets: whether sports-related contracts receive treatment distinct from conventional sports wagers. In this case, the judge’s characterization supports New York’s ability to apply its gambling rules to Novig. That conclusion should not be read as a nationwide determination covering every prediction market or every type of contract.

Kalshi’s role in the report is separate from the immediate decision concerning Novig. The judge’s remarks addressed the CFTC’s emergency protection for Kalshi, while the request being rejected concerned New York’s treatment of Novig. The supplied account does not explain the full scope of the federal order or how its protections compare with those Novig sought.

The distinction matters because criticism from the bench is not, by itself, proof of collusion. The quoted language expresses the judge’s assessment of the CFTC order, rather than establishing misconduct by either the agency or Kalshi. The provided excerpt includes no response from the regulator or the company to that characterization.

For Novig, the immediate consequence is that the requested court protection against New York’s application of gambling laws was denied. The report does not identify any resulting penalty, operational change or deadline. It also does not establish whether the refusal resolves the underlying litigation or leaves additional claims for consideration.

The next steps will depend on further court proceedings and any responses from the parties or the CFTC. The supplied report does not say whether Novig plans to appeal or whether the federal regulator will address the judge’s criticism. For now, the ruling leaves Novig without the protection it requested and places the CFTC’s treatment of Kalshi under judicial scrutiny.