The U.S. District Court for the Southern District of New York has denied prediction market platform Novig’s request for a preliminary injunction against state regulators. According to the court’s November 10, 2026 ruling, the sports event contracts offered by the company do not qualify as swaps under the federal Commodity Exchange Act.

The decision leaves the door open for New York State to apply its own gambling and sports betting laws to these products.

The ruling, issued by U.S. District Judge Colleen McMahon, focused on which regulatory authority has jurisdiction over sports prediction contracts. Ludlow Exchange LLC, the company behind Novig, had obtained designated contract market (DCM) status from the U.S. Commodity Futures Trading Commission (CFTC) in June 2026.

The company began offering sports event-based contracts to users in New York in August. However, it subsequently faced regulatory challenges under the state’s gambling and sports betting laws. On August 5, 2026, Novig filed a lawsuit against New York Attorney General Letitia James and officials from the New York State Gaming Commission.

The company’s central argument was that its sports event contracts qualified as swaps under federal commodities law and therefore fell under the CFTC’s exclusive jurisdiction.

The court, however, rejected that argument at the preliminary injunction stage. Judge McMahon concluded that the contracts in question did not meet the definition of a swap under federal law.

The ruling allows New York to require Novig to obtain a state gambling license or prohibit the offering and trading of sports contracts on the platform.