Ludlow Exchange LLC, operating as the prediction market Novig, has filed a federal lawsuit against Wisconsin Attorney General Josh Kaul and state gaming administrator John Dillett. The company asks a court to prevent Wisconsin from applying its commercial gambling laws to sports event contracts traded on its platform.

The 45-page complaint was filed in the U.S. District Court for the Western District of Wisconsin. Novig seeks preliminary and permanent injunctions along with a declaration that federal commodities law preempts state statutes as applied to its contracts. The filing followed the company’s decision to begin offering the contracts to Wisconsin residents roughly one week earlier.

Federal Regulation Versus State Gambling Rules

Novig’s core argument centers on its status as a designated contract market. The Commodity Futures Trading Commission approved Ludlow Exchange as a designated contract market on June 16. The company maintains that its sports contracts qualify as swaps under the Commodity Exchange Act and therefore fall under the CFTC’s exclusive jurisdiction.

Wisconsin has taken a different view. In April the state sued several other platforms, including Kalshi, Polymarket, Robinhood, Crypto.com and Coinbase, alleging that sports-related event contracts constitute illegal commercial gambling and a public nuisance under state law. Officials have argued that contracts tied to sports outcomes remain bets regardless of any federal designation.

The CFTC itself later sued Wisconsin officials in an effort to block enforcement. A federal judge denied the agency’s request for a preliminary injunction in late July, finding that the CFTC had not demonstrated a likelihood of success on its preemption claim at that stage. That ruling is not a final decision on the merits.

Part of a Broader Multistate Campaign

Wisconsin is the fifth state Novig has sued since August 4. Earlier actions targeted officials in New York, New Mexico, Massachusetts and Washington. The pattern indicates a deliberate strategy of seeking federal-court protection as the company expands its federally regulated exchange model.

Novig distinguishes itself from some other platforms by focusing exclusively on sports contracts and requiring users to be at least 21 years old. The company previously held a sports-betting license in Colorado before shifting to the designated-contract-market structure.

Courts elsewhere have reached varying preliminary conclusions on similar preemption questions. One federal appellate court found that the Commodity Exchange Act preempted certain state gambling laws for contracts traded on a CFTC-regulated market, while another district court declined to treat comparable sports contracts as swaps at an early stage of litigation.

Commercial Expansion Alongside Legal Action

Alongside its legal efforts, Novig has pursued commercial partnerships. In late July the company announced a multiyear agreement with the New York Mets, becoming the Major League Baseball club’s exclusive official prediction-market partner. The arrangement includes branding rights at Citi Field and access to official league data.

Prediction markets more broadly have seen substantial growth in trading activity. Data compiled across multiple platforms showed volume reaching several billion dollars in a recent period, with a notable share involving crypto-linked trading through leading venues. The sector’s increasing use of stablecoins and on-chain settlement has drawn additional attention to the regulatory outcomes of these jurisdictional disputes.

As of the latest available information, Wisconsin officials had not yet filed a substantive response to Novig’s complaint, and the court had not ruled on the request for preliminary relief. The case adds another chapter to the ongoing contest over whether sports event contracts traded on federally designated markets operate as national financial products or remain subject to individual state gambling restrictions.