Prediction Market Sues Massachusetts Officials Over State Gambling and Sports-Wagering Laws

A prediction market filed a complaint in the U.S. District Court for the District of Massachusetts seeking to block state officials from enforcing state gambling and sports-wagering laws against the plaintiff's federally regulated sports-related event contracts.

Ludlow Exchange, LLC, operating as Novig, named the Massachusetts Attorney General, along with Massachusetts Gaming Commission officials, as defendants in their official capacities. According to the complaint, the CFTC designated Novig as a contract market on June 16, 2026, and Novig began offering sports-based event contracts to Massachusetts customers the week of August 7, 2026. The complaint argued that the grant by the Commodity Exchange Act of "exclusive jurisdiction" to the CFTC over swaps traded on designated contract markets preempts state gambling and sports-wagering statutes as applied to those contracts under express, field, and conflict preemption theories.

The complaint cited Massachusetts' parallel enforcement effort against another CFTC-registered exchange, KalshiEX LLC. It stated that Attorney General Andrea Joy Campbell sued Kalshi in Suffolk Superior Court in September 2025, obtained a preliminary injunction in January 2026 barring Kalshi from offering sporting-event contracts to anyone located in Massachusetts, and later added consumer-protection claims. Novig asserted that it expects Massachusetts to bring a similar enforcement action against it and cited a Third Circuit decision, KalshiEX LLC v. Flaherty, and several district court rulings finding comparable state laws preempted by the CEA.

Novig asked the court for a declaratory judgment that the cited Massachusetts statutes and regulations are preempted as applied to event contracts traded on its federally designated exchange, along with a preliminary and permanent injunction barring their enforcement against Novig.