Novig has decided to temporarily halt two of its five lawsuits against state regulators while other cases related to prediction markets are being resolved.
A federal judge has approved a request from Novig and Massachusetts to pause their litigation concerning prediction markets. This comes as both Novig and officials from New Mexico have sought a similar suspension of legal proceedings.
On August 25, U.S. District Judge F. Dennis Saylor IV granted a joint motion from Novig and Massachusetts. The case will remain on hold until the Massachusetts Supreme Judicial Court makes a decision regarding Kalshi’s appeal against a preliminary injunction that prevents it from offering sports event contracts without a state license. The court heard arguments related to this matter in May.
This agreement also prohibits Massachusetts from initiating or continuing any civil or criminal actions against Novig regarding its sports-related event contracts for at least 14 days after the stay concludes.
Both Novig and Massachusetts contended that the legal questions raised by Kalshi’s appeal are similar to those presented by Novig, and that waiting for a resolution would enhance judicial efficiency and reduce redundant litigation.
Additionally, the court dismissed officials from the Massachusetts Gaming Commission named in the lawsuit without prejudice, leaving Attorney General Andrea Joy Campbell as the sole defendant.
In a separate move, Novig and New Mexico officials are also requesting a stay, but for different reasons. On August 25, they jointly filed to pause Novig’s federal lawsuit until August 13, 2027. This request is linked to the outcome of a lawsuit filed by the Commodity Futures Trading Commission (CFTC) against New Mexico.
The CFTC initiated legal action against New Mexico in June, aiming to prevent state officials from enforcing gambling laws against federally regulated prediction markets. New Mexico had previously taken legal action against Kalshi.
Briefing on the CFTC’s request for a preliminary injunction and New Mexico’s motion to dismiss has been completed. Both Novig and New Mexico believe that a ruling in this case could clarify the federal preemption issue central to Novig’s challenge.
Under the proposed agreement, New Mexico officials would refrain from enforcing actions against Novig. The parties are expected to submit statements by July 30, 2027, regarding whether the stay should be lifted or extended, although the court retains the authority to end or extend it earlier.
The recent developments indicate a trend of increasing pauses in prediction market cases. Novig had previously filed lawsuits against regulators in five states shortly after launching its prediction market platform.
The company has initiated legal action in New York, Massachusetts, Washington, New Mexico, and Wisconsin, arguing that the Commodity Exchange Act grants the CFTC exclusive jurisdiction over its federally regulated event contracts, thus overriding state gambling laws. In New York, a federal judge denied Novig’s request for a temporary restraining order.
Novig’s decision to pause its cases in Massachusetts and potentially New Mexico comes at a time when similar pauses are becoming more common in the broader context of prediction market litigation.
In Massachusetts, Polymarket reached a comparable agreement with state officials in March, resulting in a stay of Polymarket’s lawsuit pending the outcome of Kalshi’s case. Massachusetts also agreed not to enforce its sports betting laws against Polymarket while the case remains on hold.
Recently, Crypto.com and Washington officials reached an agreement to pause their federal dispute while the Ninth Circuit reviews consolidated cases in Nevada. Washington has also agreed not to enforce its gambling laws against Crypto.com during the pending appeals.
Similar stays are being observed in Arizona, where related litigation is on hold pending appeals. Additionally, Coinbase secured a stay in its cases against Michigan and Connecticut last week as courts await rulings in related disputes.
The increasing number of stays is narrowing the legal battle surrounding prediction markets to a smaller set of potentially significant cases.