Novig Lands CFTC Approval To Offer Sports Prediction Markets

Federal regulators have cleared a new entrant into the rapidly expanding world of sports prediction markets. On Tuesday, the Commodity Futures Trading Commission (CFTC) approved Novig's application to operate as a designated contract market focusing on sports. 

Novig isn't the only company to clear that hurdle recently. ProphetX received the same CFTC sign-off a week earlier, and both are now stepping into a field that's getting crowded fast. They'll be competing against Kalshi, which currently leads the market, as well as Polymarket, Robinhood, Crypto.com, and sportsbook operators that have launched their own prediction markets, such as FanDuel Predicts, DraftKings Predictions, and Fanatics Markets. 

The timing lines up with what's being described as a gold rush moment for the industry. Excitement around the World Cup and the NBA Finals helped push Kalshi to a new daily trading record over the weekend, with the platform processing $1.2 billion in a single day. 

JB Mackenzie, who leads prediction markets at Robinhood, told CNBC the moment feels like a supercycle, pointing to a packed sports calendar that stretches into the NFL season and the midterm elections, plus a long line of companies still waiting on the CFTC to approve their own applications. 

Novig is trying to stand out from rivals by focusing entirely on sports rather than spreading across politics, finance, and entertainment, as some larger competitors do. 

Federal regulators move to spell out the rules

That race for federal approval is underway just as the CFTC works to clarify exactly which sports contracts it will allow going forward. Earlier this month, the commission released a 267-page notice of proposed rulemaking that would formally permit prediction market apps to offer the equivalent of sports betting nationwide. 

There were some clear exceptions. Contracts tied to final scores, point differentials, win-loss results, and statistical performance would be allowed. Trades tied to a single play, such as one pitch in baseball or one shot in hockey, would not be, and neither would bets on injuries, officiating calls, or pre-college sports events. 

The agency would also block contracts involving terrorism, assassination, or war, citing national security concerns. Online casino games based purely on luck, like roulette, would remain off-limits, though games where skill plays a real role, such as poker tournaments, could still qualify. 

CFTC Chairman Michael Selig has been a consistent supporter of letting these markets operate, arguing they serve a price-discovery function that traditional sportsbooks don't. The American Gaming Association disagrees, saying these platforms let companies sidestep the state and tribal licensing and tax rules regular sportsbooks must follow. 

The commission will take public comments for 90 days before any final rule takes effect, and many expect the broader legal fight to eventually reach the Supreme Court.