TLDR
- A federal judge paused Novig’s lawsuit against Massachusetts until the state’s top court rules on Kalshi’s related appeal.
- Novig and New Mexico jointly asked to freeze their case until August 2027, tied to a separate CFTC lawsuit against the state.
- Massachusetts agreed not to take enforcement action against Novig while the pause is in place.
- Novig has sued regulators in five states over its sports event contracts.
- Other companies, including Polymarket, Crypto.com, and Coinbase, have reached similar pause agreements in their own state disputes.
U.S. District Judge F. Dennis Saylor IV granted a joint request from Novig and Massachusetts officials on August 25. The move pauses their lawsuit over prediction market rules.
The case will stay on hold until the Massachusetts Supreme Judicial Court decides Kalshi’s appeal. That appeal challenges an order blocking Kalshi from offering sports event contracts without a state license.
The state’s top court heard arguments on the Kalshi case in May. A ruling has not yet come out.
As part of the deal, Massachusetts cannot start or continue enforcement action against Novig. This protection lasts until at least 14 days after the pause ends.
The court also dropped Massachusetts Gaming Commission officials from the lawsuit. Attorney General Andrea Joy Campbell remains the only defendant in the case.
New Mexico Request Tied to CFTC Case
Novig and New Mexico officials filed a separate motion on August 25. They asked to pause their federal lawsuit until August 13, 2027.
This request connects to a different case. The Commodity Futures Trading Commission sued New Mexico in June.
That federal lawsuit aims to stop New Mexico from enforcing its gambling laws against prediction markets regulated by the CFTC. New Mexico had already sued Kalshi before that.
Briefing has wrapped up on the CFTC’s request for an injunction and on New Mexico’s motion to dismiss. Novig and the state say a ruling there could settle the core legal question in Novig’s case.
Under the proposed deal, New Mexico would not pursue enforcement against Novig during the pause. Both sides would file updates by July 30, 2027, on whether to lift or extend the freeze.
A Wider Pattern Across Prediction Market Lawsuits
Novig sued regulators in five states after launching its platform. The states are New York, Massachusetts, Washington, New Mexico, and Wisconsin.
The company argues that the Commodity Exchange Act gives the CFTC sole authority over its event contracts. It says this overrides state gambling laws.
In New York, a judge already denied Novig’s request to block enforcement there. That case is moving forward.
Novig is not alone in seeking a pause. Polymarket reached a similar deal with Massachusetts back in March.
A judge froze Polymarket’s case there too, also tied to the Kalshi appeal. Massachusetts agreed not to enforce its sports betting laws against Polymarket during that time.
Crypto.com and Washington reached their own pause last week. Their case is on hold while the Ninth Circuit reviews combined cases out of Nevada.
Washington also agreed to hold off on enforcement against Crypto.com during that wait. Arizona has a related case paused for the same reason.
Coinbase agreed to pause its lawsuits against Michigan and Connecticut last week. Those cases are also waiting on outside court rulings.
The pattern shows more prediction market cases being paused as courts wait on a smaller set of key rulings. Those decisions could shape how the rest of the disputes play out.
