The prediction market platform Novig is suing to stop the state Department of Justice from using the state’s gambling laws to prevent the firm from operating in Wisconsin.
Novig’s federal lawsuit follows DOJ’s lawsuits in April that charged three other prediction market platforms with violating Wisconsin’s recently adopted online sports gambling law.
In the new lawsuit, filed by Novig’s parent firm Ludlow Exchange LLC, the business asserts that it isn’t engaged in “gambling” but instead is “providing sports-based event contracts to customers across the United States.”
Event contracts pay out to customers who purchase a contract for a specific outcome, such as victory by a particular team in a particular game. In the lawsuit Ludlow Exchange asserts that an event contract is a “derivative” investment regulated exclusively by the federal Commodity Futures Trading Commission.
“The field here is not gambling,” the lawsuit states. “It is the regulation of trading on federally designated contract markets — the discrete activity over which Congress conferred exclusive jurisdiction” to the CFTC.
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Prediction market firm sues to escape Wisconsin gambling law
