Sweepstakes-based betting exchange Novig has submitted an application to the Commodity Futures Trading Commission (CFTC) to be a federally regulated designated contract market (DCM), the same status held by prediction markets like Kalshi.
An entity named Ludlow Exchange LLC applied for DCM status on Wednesday. CFTC filings show that Novig’s website is listed under contact information, Novig co-founders Jacob Fortinsky and Kelechi Ukah are directors of the business, and its address is the same as that of Novig.
In August, Fortinsky told InGame that the company was preparing to apply for CFTC registration. He added that being CFTC-approved and utilizing the sweepstakes model would not necessarily be “mutually exclusive,” though he didn’t offer more detail on how the two would work together.
Applications for DCM status can take years to be approved. Two DCMs — Railbird and QCEX — were approved in 2024. Both businesses first applied in 2022. Railbird was later acquired by DraftKings and QCEX was acquired by Polymarket.
News of the CFTC application was first reported by Sportico.
Novig business model
Under the sweepstakes-based model that it currently uses to operate, Novig users can play for free Novig Coins, or for Novig Cash, which can be redeemed for real money. Players can receive Novig Cash as a “bonus” when they buy Novig Coins, or as a reward for certain activities, such as logging in for five or more consecutive days.
Some regulators and legislators argue that operators using this dual-currency system amounts to unlicensed gambling. Proponents argue that sweepstakes laws, which had historically been used for promotions by non-gaming businesses like McDonald’s, give the business solid legal footing. Novig left New Jersey last year as the state implemented a new law that explicitly banned dual-currency sweepstakes wagering.
Under its current model, Novig does not charge a commission. In a 2023 press release, Novig said that instead of commission, its revenue comes through three main streams: “institutional traders, data monetization, and internal market making.”
