Novig Appeals New York Ruling Over Sports Contracts

Judge Colleen McMahon concluded that the company’s sports contracts were not swaps under the Commodity Exchange Act (CEA). The decision concerns a preliminary injunction. Novig still holds its federal exchange designation, and the underlying lawsuit remains unresolved.

The 111.11x NFL Parlay in the Court’s Opinion

In her 35-page ruling, McMahon examined contracts offered through Novig’s app as of November 5. One featured NFL parlay required victories by four underdogs: the Cleveland Browns, Miami Dolphins, New York Jets and Philadelphia Eagles.

The advertised payout was 111.11x. A $100 contract could have returned $11,111.11, including the purchase price. That works out to a potential profit of $11,011.11. All four teams lost.

McMahon also looked at Novig’s game lines and player props. Similar selections were available at conventional sportsbooks. Novig matches customers against one another rather than taking the opposite side of their trades, but the judge did not consider that distinction sufficient to turn the products into financial swaps.

Novig Once Held a Colorado Betting Licence

The company’s regulatory history gave the court another point of comparison. Novig obtained an internet sports betting operator licence in Colorado in 2023. It later returned that licence and adopted an exchange model. On June 16, 2026, the Commodity Futures Trading Commission designated Ludlow Exchange, the company behind Novig, as a contract market.

Novig began offering sports contracts to New York customers in August.

McMahon found that federal designation alone did not determine how those contracts should be classified. She also pointed to state licensing and geographic restrictions as ways Novig could comply with gambling laws while continuing to operate its federally designated exchange.

The Appeal Challenges More Than Contract Classification

The court went beyond deciding whether Novig’s products were swaps. McMahon also examined what would happen if a higher court disagreed with her classification.

Even under that alternative, she found that the CEA would not prevent New York from enforcing its gambling laws against Novig’s sports contracts.

According to Sports Betting Dime, Novig filed its notice of appeal with the Second Circuit on November 10. There is no confirmed appellate stay or reversal.

New York may therefore seek to enforce its betting rules while the dispute continues. The ruling does not itself order Novig to shut down nationwide.

What the Appeal Could Mean Beyond New York

Novig is facing regulatory pressure elsewhere, too. It was among the ten businesses named in Ohio’s October cease-and-desist action over sports event contracts, which 15M previously covered.

Winning the swap argument may not be enough for Novig. McMahon found that New York could still enforce its gambling laws even if the contracts qualified as swaps. How the Second Circuit handles that finding could matter to other prediction markets facing state regulators.