A federal judge in New York has denied a preliminary injunction to the sports prediction-market platform Novig, ruling on Tuesday, November 10, that the company's sports event contracts are not 'swaps' under federal commodities law — a decision that lets New York require Novig to hold a state gambling licence or stop listing the contracts for New York customers.
Source: The Block, Nov 11, 2026
U.S. District Judge Colleen McMahon of the Southern District of New York filed a 35-page opinion and order in Ludlow Exchange, LLC v. James, case No. 1:26-cv-06676, docket entry 73. Ludlow Exchange, LLC is the legal entity behind Novig. The judge had already refused the company a temporary restraining order on August 11.
Source: iGaming Times, reporting the SDNY opinion via CourtListener, Nov 11, 2026
What the court decided
The case turned on the definition of a 'swap' in the Commodity Exchange Act. Judge McMahon concluded that Novig's contracts do not depend on events or contingencies that are 'associated with a potential financial, economic, or commercial consequence' within the meaning of section 1a(47)(A)(ii) of the Act. 'Accordingly, they are not swaps under the CEA,' the filing said, as quoted by The Block.
Because the contracts are not swaps, the Commodity Futures Trading Commission's exclusive jurisdiction over swaps does not reach them, and New York may apply its gambling and sports-wagering laws to Novig's activity. The decision allows the state to require the exchange either to obtain a state gambling licence or to prohibit the listing and trading of sports event contracts on its platform.
The judge went further than the court in Kalshi's New York case: where Judge Analisa Torres had assumed without deciding that Kalshi's contracts were swaps, Judge McMahon decided the threshold question against the exchange, and then kept a full preemption analysis as a fallback.
Even as swaps, state law would still apply, judge finds
In case a higher court disagrees with her on the swap question, the judge also ruled against Novig on preemption. She read the Act's grant of 'exclusive jurisdiction', with its savings clause, as covering the licensing and operation of contract markets — not the incidental application of state gambling law. Field preemption failed, she found, because Congress expressly preempted state gaming law elsewhere in the Act for a narrow class of swaps, and not here.
Conflict preemption failed as well, because Novig could seek a New York licence and geofence its service: the company previously held and returned a licence in Colorado, and the judge noted that FanDuel offers its sportsbook in 24 states, adding there is no reason Novig could not follow the same model.
How the case reached this point
Novig received the CFTC's designation as a contract market on June 16, 2026, and began offering sports event contracts to New York customers in August. On August 5, 2026, the company sued New York Attorney General Letitia James and officials at the New York State Gaming Commission — including executive director Robert Williams and chair Brian O'Dwyer — arguing that federal commodities law preempts state regulation of its products.
In her opinion, the judge examined Novig's actual listings, including markets on the Giants–Eagles game of November 8 — spreads, parlays and player props — and found the contracts 'bear more than a passing resemblance to sports betting', and were available in equivalent form on FanDuel and BetMGM. The opinion also quotes Novig and its chief executive describing the company's 'north star' as becoming the largest sports betting platform in the world and its mission as to 'democratize and financialize sports betting'.
Judge McMahon gave the CFTC no deference, calling its sportsbook carve-out and its swap proposal 'inherently contradictory'. If a FanDuel wager is not a swap and the customer sees no difference, she reasoned, a Novig contract cannot be one either — because who is on the other side of the bet is not a difference that makes a difference. She also said the CFTC's August 11 order telling Kalshi to keep operating 'smacks of a collusive effort between a regulator and regulatee', and noted the agency's current rule bars listing gaming contracts.
A wider fight, in New York and beyond
The ruling follows the Second Circuit's refusal on November 3 to grant injunctions to Kalshi and Coinbase, and a similar earlier New York decision against Kalshi. Sports betting and gaming lawyer Daniel Wallach wrote on X that federal courts within the Second Circuit have now issued 10 rulings in sports prediction-market litigation, all favouring the states, and that Attorney General James 'could literally cross the street and file a state-court civil enforcement action against Novig as soon as today'.
Novig is pressing the same argument in several other states. It is litigating in Missouri, where the state has counter-sued under the Unlawful Internet Gambling Enforcement Act, and has sued officials in Massachusetts, Washington, New Mexico and Wisconsin, according to federal court records cited by iGaming Times. In the threshold analysis, the judge also noted a point pressed by 24 tribes and tribal organisations as friends of the court: a broader reading of 'swap' would cut across the Indian Gaming Regulatory Act.
What happens next
Novig had not said publicly by November 11 whether it would appeal, and The Block reported it had reached out to the company for comment. A denial of a preliminary injunction can go straight to the Second Circuit — the route Kalshi took after Judge Torres refused its New York injunction. The exchange's practical choice in New York is now between an appeal and applying for a state licence.
For readers in New York and across the United States — including the many Punjabi diaspora families who follow American sports — the ruling draws a bright line for now: platforms that sell contracts on games may be treated by New York as sportsbooks, with the licensing, tax and consumer-protection rules that come with that status, whatever label the platform uses. The final word has not been spoken: the Second Circuit, and probably eventually the Supreme Court, will decide whether Judge McMahon's reading stands.