Novig Secures Historic CFTC Nod for 50-State Prediction Market

• The CFTC has granted Novig Designated Contract Market (DCM) status, allowing it to bypass state-by-state licensing and launch a regulated sports prediction exchange across all 50 states
• Approved in just five months, the quick turnaround marks one of the fastest corporate designations in CFTC history
• Novig’s national rollout puts it in direct competition with rival platform ProphetX, which secured its own federal approval just days prior

Novig, a sports-first peer-to-peer exchange, announced Tuesday (June 16) that it has secured federal approval from the CFTC to operate a regulated prediction market nationwide.

The Commodities Futures Trading Commission (CFTC) granted Novig Designated Contract Market (DCM) status, paving the way for the company to “expand nationwide under a single regulatory framework.” The DCM license is pivotal for any company seeking to operate a regulated prediction market in the US.

With CFTC designation, Novig will be able to operate across all 50 states and implement robust safeguards more commonly associated with financial markets, including enhanced market surveillance, protections against manipulation and insider activity, and comprehensive compliance standards designed to protect participants,” said the company in a statement.

Privately held Novig said the approval was one of the fastest of its kind in the history of the CFTC — the federal agency with regulatory jurisdiction over prediction markets.

Novig, ProphetX Adding Competition to Prediction Markets

Already teeming with competition, the fast-growing prediction markets industry is getting more of that with Novig securing DCM licensing and rival ProphetX procuring similar regulatory approval several days ago. On June 11, ProphetX said it was approved “to operate America’s first federally regulated sports-native prediction market.”

Companies such as Novig and ProphetX believe they can carve out attractive niches because sports bettors are looking for alternatives to old guard sportsbooks.

“Our message is black and white – prediction markets bring a fair, transparent environment to what is currently an unfair, opaque space with sportsbooks,” said ProphetX CEO and cofounder Dean Sisun in a post on X.

“Simple as that. Sportsbooks are criminals hiding in plain sight. Anyone who wants a better experience should be rooting against them. We will continue battling them.”

There’s evidence that some bettors and traders are embracing the sports-first models offered by Novig and ProphetX. Specific to Novig, which raised $105 million across two funding rounds dating back to last year, the company already topped “$5 billion in cumulative volume as more users adopt a platform that emphasizes efficiency and transparency.”

A Rapidly Crowding Marketplace

In another sign of rising competition in the prediction market space, 365Prediction, the company run by former PlayUp CEO Dr. Laila Mintas, is also seeking DCM approval from the CFTC.

Mintas is a vocal proponent of event contracts, noted at a recent conference that the emerging industry could render traditional sports betting obsolete.

She’s also made clear that she views sports derivatives as more comparable to trading and not akin to sports wagering because the transactions take place on an exchange and traders aren’t competing “against a house that always wins.”

365Prediction believes the term “gaming” should be defined at the federal level and not by a hodgepodge of state regulators. The company is hoping the CFTC is ultimately able to confirm that “exchange-traded, centrally cleared event contracts are NOT ‘sports betting’ under state law.”