Novig, a sports-centric exchange, has reported a robust start with significant trading activity as it navigates regulatory challenges in five states.
In its first week of operating under federal regulations, Novig achieved over $125 million in notional trading volume, indicating a strong demand for its new prediction market platform, which was previously a sportsbook and sweepstakes operator.
The platform launched nationwide on August 4, shortly after receiving approval from the Commodity Futures Trading Commission (CFTC) to operate as a designated contract market (DCM).
According to co-founder and CEO Jacob Fortinsky, the highest trading volume recorded in a single day since the launch reached $26.3 million. He shared this information during an interview with CNBC.
Parlays made up about one-third of the trading volume in Novig's opening week, with baseball being the most traded sport, as reported by sources familiar with the company's operations.
Novig's initial sports trading volume outperformed the opening weeks of competitors like Kalshi, Polymarket US, Underdog, and DraftKings’ DKeX, based on the company’s calculations.
The launch positions Novig favorably among new entrants in the prediction market, a sector already generating billions in weekly trading activity. Dune Analytics data indicates that selected prediction markets had approximately $3.46 billion in taker volume during the week starting August 3, with Kalshi leading at $2.48 billion.
In the following week, the total rose to about $3.55 billion, with Kalshi again at the forefront. Smaller exchanges like Rothera and Underdog also reported significant volumes, although their reporting periods do not align with Novig's.
Unlike other operators that are diversifying into financial products, Novig intends to concentrate solely on sports-related markets. Fortinsky emphasized, “Our focus is on markets tied directly to sports and competition.”
Founded in 2021 as a sports betting exchange under a Colorado license, Novig transitioned to a sweepstakes-based model in 2024 before adopting the federally regulated prediction market framework.
Novig enforces a 21-and-over age requirement, despite the federal regulations allowing customers as young as 18. Recently, it introduced a responsible trading framework, which includes identity verification, deposit limits, loss limits, cooling-off periods, and self-exclusion options.
Following its nationwide launch, Novig has intensified its legal challenges against officials in five states, including New York and Massachusetts. The company argues that the Commodity Exchange Act grants the CFTC exclusive jurisdiction over its federally regulated contracts, overriding state gambling laws.
However, a federal judge recently denied Novig’s request for a temporary restraining order to halt state enforcement of gambling laws against it. The legal battles are still in their infancy, but unfavorable rulings could expose Novig to state regulatory actions.