Novig Loses Bid to Block New York Gambling Enforcement

By Andrew R. Jacobs, Esq. | Founder & Managing Attorney, Jacobs Counsel LLC | Director, Sports, Entertainment & Gaming Initiatives, Seton Hall University School of Law | Super Lawyers Rising Star 2026

A prediction market can face pressure from both directions. On November 10, a federal judge left New York officials free to apply state gambling law to Novig's sports contracts. Five days earlier, the Commodity Futures Trading Commission (CFTC) told federally registered exchanges to end domestic access restrictions that violate its impartial-access rules or explain why they cannot. That puts the decision about who can trade, and where, back on the operator.

What the ruling changes

Judge Colleen McMahon denied Novig's request for a preliminary injunction. At that stage, she concluded that Novig's sports event contracts fall outside the Commodity Exchange Act's definition of a swap. She also concluded that New York could apply its gambling laws to the betting activity even if the contracts qualified as swaps. Novig appealed on November 10. The Second Circuit opened the appeal on November 12 as No. 26-3263.

The judge discussed New York licensing and limiting access by location as one possible way to comply with state law. The CFTC's interpretation gives exchanges 30 days to end domestic restrictions that violate the federal rules or explain why compliance is infeasible. An operator deciding whether to change access should start with the products it offers, where users trade and any orders that apply to its exchange. Our analysis of the CFTC access guidance explains the federal side.

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What sponsors and affiliates should check

New York bars advertising or promoting an unlicensed sports wagering platform to people in the state. If you promote a platform offering sports contracts, review whether that provision applies to the product and where the campaign actually reaches people. Read the agreement for who can pause a promotion, what happens to fees when it pauses and who is responsible for limiting distribution.

Jacobs Counsel advises operators and commercial partners on prediction market compliance under New York, New Jersey and Ohio law.

Sources

District court order · Second Circuit docket · CFTC access interpretation · New York wagering law, § 1367-a

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