Peer-to-peer sports trading app Novig on Tuesday received approval from the Commodity Futures Trading Commission (CFTC) as a Designated Contract Market (DCM).
With approval secured, the platform is now eligible to operate as a licensed prediction market platform in all 50 states.
A new operator joins the market
Receiving approval from the CFTC means that Novig is now required to operate with guidelines established by the federal body. It will also receive the backing of the CFTC, which has supported prediction platforms in ongoing debates with state regulators regarding the legality of sports event contracts.
An announcement confirming the approval noted that Novig received “one of the fastest designations of its kind,” while championing “fairness, transparency, and integrity.”
Novig’s defining characteristic is that it allows users to risk money predicting the outcomes of sports without a traditional vig. Instead, it has an internal fee and allows users to receive better odds and payouts for winning prognostications.
It also does not apply limits to customer accounts, unlike certain sportsbooks.
“Novig is the best place to trade sports,” said Jacob Fortinsky, co-founder and CEO of Novig. “From day one, our vision has been to operate within a single national framework that raises the standard for the entire category.
“Novig is the first sports prediction market built by sports traders for sports traders, and the momentum we've seen to date reinforces that there is real demand for a more efficient, and ultimately more profitable way for sports fans to participate in sports markets.
Ready to offer prediction markets
Novig affirmed its commitment to building a fair environment for users, not only with its absence of a vig, but by abiding by basic rules and enforcing protections.
“Federal oversight allows us to scale within a framework built on trust, transparency, and fairness,” Fortinsky said. “By aligning incentives with users and removing the structural disadvantages of legacy betting platforms, we're building a fundamentally different model where participants aren't playing against the house, but operating within a fair and transparent market.”
Novig applied for CFTC licensing in a filing dated Jan. 21 under the business name Ludlow Exchange LLC. It already had an in-house trading system at the time the application was filed.
Evolution and early success
Novig began in 2024 as a state-licensed betting shop. It later switched to a sweepstakes model, before now capitalizing on the momentum of the prediction industry.
Despite only being around for two years and undergoing a pair of strategic changes in direction, Novig has processed $5 billion in transitions from customers. Receiving its CFTC license will allow it to expand at a much greater rate and reach markets that do not offer legal sports betting or sweepstakes models.
That said, the prediction market industry is firmly under the control of top operators Polymarket and Kalshi.
DeFi Rate showed that Polymarket handled nearly $2 billion in trading volume in the week that ended on May 10, the most recent week for which data was available. That number spiked to $6.2 billion on the week ending on June 14 for Kalshi.
Novig will be aided in its attempt to break into the prediction market industry by the ongoing FIFA World Cup, which is generating hordes of trades at numerous operators.
The Trade Handle Prediction Markets Take
The prediction market space is going to face lots of competition as the industry continues to expand. While Kalshi and Polymarket control their destiny at the top of the market, newcomers have the opportunity to innovate and present new products, offers, and models to customers. Novig has made several changes in direction and looked to stay on the front foot, and it will need to continue with the mindset to stand out from other operators.