A new derivatives exchange affiliated with sports-focused platform Novig has entered the federal regulatory pipeline.
Ludlow Exchange, LLC recently appeared in the Commodity Futures Trading Commission’s (CFTC) industry filings portal as a pending Designated Contract Market (DCM) applicant, according to the agency’s public listings.
The filing is notable because Ludlow’s application materials list Novig as its holding company, linking the proposed exchange to a platform that has operated a peer-to-peer sports prediction product using a sweepstakes-style model. In August, after Novig announced the close of an $18 million Series A funding round, the company’s co-founder and CEO Jacob Fortinsky, who signed the Ludlow Exchange’s “Form DCM” and is listed as its founder and CEO, told InGame that CFTC approval and Novig’s current sweepstakes operations would not necessarily be “mutually exclusive.”
Novig officials have not publicly commented on what the new exchange could offer or how closely it would be integrated with Novig’s existing business. DeFi Rate has reached out to Fortinsky for comment.
What Ludlow Exchange filings reveal
While the CFTC filings do not describe Ludlow’s proposed markets, the exchange’s rulebook and “compliance with core principles” filing outline a structure that closely resembles other event-contract exchanges that have sought or received CFTC approval.
Among the details disclosed in the filings:
- Contracts sized at $1, with prices quoted in dollars and cents
- Intends to offer binary contracts (i.e. with Yes/No positions) and “combination contracts” that depend on multiple outcomes (like parlays or “combos”)
- A fully collateralized trading model, with no margin or leverage
- An internal Outcome Review Committee empowered to determine final market outcomes for settlement
- Ludlow says it does not intend to offer intermediated trading, like through third-party FCMs
The documents reference clearing contracts through a clearinghouse, but Ludlow is not pursuing Derivatives Clearing Organization (DCO) registration and does not identify a clearing partner. That structure mirrors other recent DCM applicants that rely on third-party clearing operators. DraftKings’ in-the-works DCM, Railbird Exchange, for example, disclosed in its filings plans to rely on third-party clearing, with Polymarket Clearing (formerly QC Clearing) designated as its clearinghouse.
In the Ludlow Exchange DCM filing, initial contract categories are not outlined and there are no explicit references to sports event contracts. But given Novig’s experience and established user base, it seems likely that sports will at least be a part of any potential new platform.
The filings reference ludlowexchange.com as a possible destination for the DCM-approved platform. There is minimal information currently available on the site.
Novig’s shrinking sweepstakes footprint
The appearance of a Novig-linked DCM filing comes as the company’s state-by-state availability has narrowed. Novig initially pursued a fully licensed sportsbook model, launching a real-money betting app in Colorado in 2024 before exiting the state after regulators declined to approve its planned exchange structure.
Later in 2024, Novig pivoted to the sweepstakes model and launched in 42 states. Novig operates using a dual-currency system in which users can acquire free “sweepstakes” currency (Novig Cash) alongside a separate, non-redeemable currency (Novig Coins). Novig Cash can be obtained through promotions, with the purchase of Novig Coins, or via mail-in requests, and can be redeemed for cash prizes.
By structuring its platform as sweepstakes gaming, Novig positioned itself outside of traditional gambling frameworks. But the model has increasingly drawn scrutiny from state regulators, with several states moving to prohibit sweepstakes-based gaming platforms. Those enforcement efforts, which also target online sweepstakes casinos, have narrowed the number of jurisdictions in which Novig and similar operators are willing or able to offer their products.
In light of state efforts to restrict sweepstakes gaming, including full-on bans signed into law in New York and California in 2025, Novig has pulled access in a handful of states. It is currently available in 36 states, as well as Washington D.C.
Sports platforms eyeing CFTC approval to offer prediction markets
Ludlow Exchange’s DCM application is listed as “pending” in the CFTC portal alongside two other sports-focused companies seeking DCM designation.
ProphetX, a similar sports betting exchange platform that uses the sweepstakes model, is pursuing approval to operate as both a DCM and a DCO, signaling its intention to launch a full-service prediction market platform.
Another pending applicant, RSBIX, has been described by its founder, gaming lawyer Jeff Ifrah, as a planned sports-focused exchange. RSBIX has been linked to Matchbook, which operates a sports betting exchange in the U.K. Matchbook has said it plans to use a new prediction-market platform in the U.K. as a “road test” ahead of a potential U.S. expansion.
While that U.K. platform has yet to launch, Matchbook has unveiled a B2B-facing “Matchbook Predictions” website marketing the technology to operators.
Novig’s filing follows a broader push by some major sports gaming companies into prediction markets. DraftKings, FanDuel, Fanatics, Underdog, and PrizePicks have each rolled out prediction products, which include sports event contracts in some states, through partnerships with CFTC-regulated platforms.
Sports event contract trading remains under fire in some states
Novig’s filings for Ludlow Exchange arrive at a moment of heightened regulatory scrutiny for sports event contracts. State regulators have increasingly argued that markets tied to sporting event outcomes are unapproved sports wagering and therefore fall within state gambling laws. The tension has prompted several platforms, including Crypto.com and the new prediction products from FanDuel and DraftKings, to limit or remove access to sports markets in certain states as enforcement actions and legal challenges continue to play out.
At the same time, Kalshi and other prediction market platforms have been at the center of a growing wave of litigation aimed at preserving the right to list sports event contracts under CFTC oversight. Those court battles, which hinge on federal preemption, the scope of the Commodity Exchange Act, and the line between derivatives and gambling, are likely to shape whether platforms like Ludlow Exchange and Novig can ultimately offer sports prediction markets nationwide, or face fragmented, state-by-state constraints.
