Novig sues Wisconsin AG as crypto’s prediction-market fight widens

Prediction market Novig sued Wisconsin’s attorney general on Friday in a fight over whether sports prediction markets fall under federal derivatives rules or state gambling laws.

Prediction markets have emerged as a burgeoning trading platform. Artemis data across 12 platforms shows prediction market trading volume reached $9.50 billion on August 16, 67 times the $139.8 million a year earlier.

Crypto-linked volume on Kalshi and Polymarket totaled $1.46 billion, or 15.4% of the market tracked. The outcome of the case could affect how easily prediction markets can operate across state lines and integrate with crypto infrastructure.

A lawsuit filed before the state could sue

Ludlow Exchange LLC, the operator of Novig, has lodged a 45-page lawsuit against Attorney General Josh Kaul and state gaming official John Dillett in the U.S. District Court for the Western District of Wisconsin. The lawsuit claims that Novig started offering event contracts to residents of Wisconsin just over a week ago and is requesting preliminary relief.

Novig says the preemptive lawsuit is necessary because Wisconsin has already sued other prediction-market operators over similar contracts.

Wisconsin began its campaign in April, suing Kalshi, Polymarket, Robinhood, Crypto.com and Coinbase over sports-related event contracts, alleging that the contracts violated its commercial gambling laws and constituted a public nuisance.