Jacob Fortinsky, 28, had a busy weekend. “I was a groomsman at two weddings this weekend,” he told me over Zoom. His sports trading company, Novig, was busy too. The company launched a new prediction market last week, generating $18 million in trading volume on its first day. Now, Novig has added a “Responsible Trading Framework” to its exchange rulebook, outlining safeguards designed to position the company as a more responsible prediction market platform.
Unlike industry leaders such as Polymarket and Kalshi, which allow people 18 and older to participate, Novig requires users to be at least 21. Fortinsky said the policy responds to “legitimate concerns” about younger participants’ vulnerability to risky behavior. Those concerns have also been raised by the NCAA and other groups, including through lobbying activities. Fortinsky believes Novig’s age requirement could prove prescient as concerns grow about the potential effects of prediction markets on teenagers. “You’ll have a broader view of younger traders,” he said. “That group is particularly susceptible to irresponsible behavior and economic ruin.”
Novig’s rulebook also bans marketing directed at minors and restricts promotional tactics, including advertisements that describe trading as risk-free or appeal to people experiencing financial hardship. For example, when Novig advertises on TikTok, its campaigns are configured to target users over 21. Fortinsky said the restrictions are intended to reinforce Novig’s image as a “serious, legitimate financial product.” “I think some of our competitors are seen as being a little more blunt in some ways,” he said, without identifying a specific rival.
Novig focuses exclusively on sports prediction markets, avoiding politically sensitive contracts involving subjects such as U.S. elections or the war in Iran. Even so, the company operates at the center of an expanding regulatory battle. Prediction market platforms and federal regulators are facing off against state regulators, tribal authorities, and, in some cases, traditional sportsbooks and casino operators. Dozens of legal disputes are unfolding across the United States, with states accusing Kalshi and other platforms of illegally offering gambling. Kalshi has challenged those claims in court, while the Commodity Futures Trading Commission, which oversees the industry, is suing several states and arguing that federal regulators have sole jurisdiction over these markets.
Novig has also faced public criticism. After the New York Mets announced a recent partnership with the company, the baseball team faced a wave of criticism on social media. One post called the partnership “despicable.”
A ban on sports-related event contracts would create serious problems for major platforms such as Kalshi and Polymarket, which generate substantial activity from sports markets. For Novig, whose business is centered entirely on sports, the consequences could be even greater.
Fortinsky has responded aggressively to the legal challenges. Within three days of launching, Novig sued New York, Massachusetts, New Mexico, and Washington—four states that have taken particularly strong positions against prediction markets. The company is seeking to prevent those states from applying gambling laws to federally regulated, licensed exchanges. Sports gambling attorney Daniel Wallach told WIRED that the lawsuits were a “great marketing ploy” and a way for Novig to announce its arrival in the market.
Whether Novig will prevail remains uncertain. Recent court decisions have generally favored state attorneys general. A New York judge rejected Novig’s request for a temporary restraining order, concluding that it could undermine an earlier ruling in a related case against Kalshi. “There’s an increasingly positive outlook for the state,” Wallach said. Still, the legal landscape could shift. Wallach and other observers expect the dispute over prediction market regulation to eventually reach the U.S. Supreme Court.
Source: www.wired.com