Peer-to-peer sports trading platform Novig can now operate as a federally regulated prediction market. The company says the approval process was the fastest for any Designated Contract Market in CFTC history.
The designation, granted to its Ludlow Exchange LLC entity, creates a federal route to offer sports-based event contracts without relying on state-by-state sportsbook licensing models.
A Different Economics Model
Novig is trying to replace the traditional sportsbook model with an exchange model where users trade directly with one another through an order book, with prices set by supply and demand.
“The sportsbook era is ending,” Novig’s founder said. “We’re building the financial market for sports… high time that sports event contracts are treated as a legitimate asset class.”
— Jacob Fortinsky (@j__fort) June 16, 2026
The company has already surpassed $5 billion in cumulative trading volume and recently closed a $75 million Series B round led by Pantera Capital. With a federal license in place, Novig can now pursue national scale without applying for separate gaming licenses in every state.
Novig is not the only company trying to move sports trading out of state gambling regimes and into the federal derivatives framework.
Sporttrade recently said it would shut down its sportsbook operations across five states and focus on becoming a CFTC-regulated DCM and DCO.
DraftKings has launched DKeX, its own CFTC-regulated exchange for event contracts. FanDuel, meanwhile, has partnered with CME Group to develop prediction products.
Why Brokers Should Pay Attention
For multi-asset brokers and infrastructure providers, the shift creates a new category of regulated event trading. A federal DCM model could give platforms access to a national US market, something traditional sportsbooks have struggled to achieve under state gaming rules.
If sports contracts are treated as derivatives, the infrastructure changes with them. The opportunity shifts from sportsbook operations to regulated trading, clearing and liquidity provision.
The exchange model also changes how operators make money. Instead of earning from a built-in sportsbook margin, they compete for order flow through liquidity, pricing, technology, and market structure.
Novig’s approval adds another federally regulated venue to a market that has historically been dominated by sportsbooks.
Liquidity is still a challenge. Novig now has a federal route to market, but the exchange model still has to prove it can attract trading activity at scale.
This article was written by Tanya Chepkova at www.financemagnates.com.
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