Federal judge denies Novig's bid to block New York gambling laws, ruling its sports contracts are not swaps

Novig has lost its first bid to stop New York from applying its gambling laws to its sports event contracts.

In an opinion and order filed November 10, 2026, Judge McMahon of the U.S. District Court for the Southern District of New York denied the preliminary injunction Novig sought on August 6. The CFTC designated Novig as a contract market on June 16, 2026.

The court agreed with the Third and Sixth Circuits that the contracts depend on an "event or contingency." It held that the events are not "associated with a potential financial, economic, or commercial consequence," because bettors "are not hedging." The opinion says Novig offered "only hypotheticals" of business hedging and markets to "ordinary people who want to bet on sports games."

The court said it "need not defer" to the CFTC, and that the agency's change of position "appears calculated to influence the outcome of the ongoing litigation." In the alternative, it found no preemption even if the contracts were swaps. It described a CFTC order to Kalshi as one that "smacks of a collusive effort," and said Novig could get a New York license, as it once held one in Colorado, and use geofencing. As an example, the opinion cites a four-game NFL parlay on Novig with a 111.11x payout.

The judge did not reach the other injunction factors. AskSpinner tracks related cases on its prediction-market litigation tracker. Novig is also in court against Missouri.