TLDR
- A federal judge denied Novig’s request for a preliminary injunction against New York officials.
- Judge McMahon found Novig’s sports contracts are not “swaps” under the Commodity Exchange Act.
- New York can now require Novig to hold a state gambling license or stop listing its sports contracts.
- Novig became a CFTC designated contract market in June 2026 and entered New York in August 2026.
- New York has recently used its gambling laws against other firms offering similar contracts.
A federal judge has ruled that New York can apply its gambling laws to Novig, a sports-contract exchange regulated by federal authorities. The decision came on November 10, 2026, in the US District Court for the Southern District of New York.
US District Judge McMahon denied Novig’s request for a preliminary injunction. Novig had asked the court to stop state officials from treating its sports event contracts as gambling while the case moves forward.
At the center of the ruling is a legal definition. Judge McMahon found that Novig’s sports-related contracts are not “swaps” under the Commodity Exchange Act, according to the court filing.
The ruling gives New York the go-ahead to treat the exchange’s sports products under state gambling rules. Novig had argued against that approach when it filed suit.
The Swaps Question
The Commodity Exchange Act is the main federal law that governs futures, options and swaps markets in the United States. Products that fall under it are overseen by the Commodity Futures Trading Commission, known as the CFTC.
Novig’s case relied on the idea that its contracts belong in that federal category. If they were swaps, the company could argue that federal rules, not state gambling laws, should apply to them.
The judge did not accept that view at this stage. By finding the contracts are not swaps, the court left room for New York to use its own gambling rules against the exchange.
A preliminary injunction is a temporary court order issued before a case is fully decided. Its denial means state officials are not blocked from acting while the lawsuit continues.
How the Dispute Unfolded
Novig was named a designated contract market by the CFTC in June 2026. That status allows an exchange to list contracts under federal oversight.
Two months later, in August 2026, Novig began offering sports event contracts to customers in New York. The state then moved to treat those products as gambling.
Novig responded by filing a lawsuit against New York officials. The defendants include Attorney General Letitia James and the executive director, chair and commissioners of the state gaming commission, all named in their official capacities.
The case is listed as 1:26-cv-06676 in the Southern District of New York. The court’s ruling on the injunction request was issued on November 10.
Under the decision, New York can require Novig to hold a state gambling license. If the company does not obtain one, the state can require it to stop listing its sports contracts there.
Novig is not the only business facing this kind of action. According to the court filing, New York has recently invoked its gambling laws to try to shut down other businesses offering similar sports event contracts.
The ruling does not end the lawsuit. It addresses only Novig’s request for early relief while the broader case continues in court.
Observers are now watching for Novig’s next move in the case. That could include an appeal of the judge’s decision to deny the injunction.
The state gaming commission may also move to enforce its licensing rules against the exchange. Any such action would follow the court’s finding that New York’s gambling laws can apply to Novig’s sports contracts.
