Digital Wager Wire highlights the most significant events affecting the domestic and international sports betting and gaming industries each week throughout the year.
Key Takeaways
Novig’s valuation has surged: Its valuation reportedly quadrupled to $2 billion, boosted in part by a high-profile advertising campaign featuring Sydney Sweeney.
Prediction markets face growing legal challenges: States argue companies like Novig, Kalshi, and Polymarket are effectively operating sportsbooks without state licensing, taxes, or regulations.
New York is targeting Polymarket: Attorney General Letitia James and Governor Kathy Hochul filed a lawsuit arguing Polymarket violates state gambling laws and bypasses safeguards such as the 21+ betting age.
Novig’s Value Quadruples
Sex sells, at least that’s what those in the PR industry say, and it is hard to argue with that assessment after Novig’s racy advertising campaign featuring the sultry Sydney Sweeney had tongues wagging and heads turning right before the NFL season began.
Novig is a prediction market that offers the highly litigated sports event contracts that have generated circuit splits throughout the country. State gaming regulators contend that they are nothing more than bookmakers masquerading as derivatives markets, while the prediction markets argue that these contracts are the same as those being offered on other commodities such as silver and gold.
Regardless, the prediction markets, like Novig, continue to offer these sports event contracts under the federal regulatory framework overseen by the Commodity Futures Trading Commission, while disputes continue over the extent of state gambling authority.
Kalshi and Polymarket are the industry leaders, and not many had even heard of Novig before their advertising blitz featuring the Hollywood actress, sans clothes, with nothing covering her except a football, basketball, and assorted sports equipment.
Novig is currently seeking funding, and it is reported that its valuation has quadrupled to $2 billion in less than a year since its last round of financing. This figure does not mean that Novig will receive $2 billion in new money, only that the company is valued at that dollar amount.
New York Sues Polymarket
New York officials have made it crystal clear that they do not want prediction markets offering sports event contracts that can cannibalize revenue from its lucrative digital sports betting industry without paying their own fair share to the Empire State. In July, Attorney General Letitia James filed suit against Kalshi, and now she has done the same against another prediction market heavyweight, Polymarket.
Both James and Governor Kathy Hochul announced a lawsuit against Polymarket in September. This legal action is similar to what other states have filed against the prediction markets, and New York contends Polymarket has violated gaming laws as stipulated in the New York State Constitution and the Federal Interstate Wire Act.
“Our gambling laws exist to protect New Yorkers, prevent the potential harms of problem gambling, and ensure funding for educational and public benefit programs,” New York Attorney General Letitia James said in a statement. “By skirting New York’s laws, Polymarket is targeting the most vulnerable and depriving New York families of critical services and support.”
One point of contention stems from prediction markets’ ability to offer contracts to 18-year-olds, even though the legal minimum to wager in New York is 21, a responsible-gaming guardrail that prediction markets avoid because of their federal licensing.
Polymarket has responded to the suit, with the company’s Chief Legal Officer Neal Kumar saying, “While the AG’s decision to copy/paste a recycled lawsuit is disappointing, we’ll fight for our users. We didn’t run to preemptively sue the state — we chose to engage with them directly on the substance and address their concerns. They preferred the media hit.”
