Twenty-eight-year-old Jacob Fortinsky has been busy. “I was a groomsman at two weddings this weekend,” he tells me over Zoom. Also, the sports trading company he runs, Novig, launched its prediction market last week, facilitating $18 million in trading volume on its first day. Today, Novig launches a “responsible trading framework” in its exchange rulebook, codifying its guardrails as part of its effort to be seen as a kinder, gentler prediction market player.
Unlike industry leaders like Polymarket and Kalshi, which allow people 18 and older to participate, you have to be at least 21 to use Novig. Fortinsky says that decision was made in response to “valid concerns” put forth about the susceptibility of younger participants to risky behavior, including lobbying from the NCAA and other professional groups. Fortinsky sees this move as staying ahead of the curve as concerns grow about the negative impact that prediction markets can have on teens. “There’s a broader reckoning coming with the younger traders,” he says. “That group is particularly susceptible to irresponsible behavior and financial ruin.”
Novig’s rulebook also prohibits marketing to minors, and lays out guidelines banning other marketing practices, like ads that claim there’s no risk or ads that try to appeal to a prospective participant’s money troubles. That means when it advertises on TikTok, for example, it uses a setting that allows targeting only people over 21. Fortinsky positions these restrictions as part of Novig’s push to be seen as a “serious, legitimate financial product” as it comes onto the scene. “Some of our competitors, I think, have been seen as being a little bit more cavalier in certain regards,” he says. (He declined to name specific rivals.)
Because Novig only offers sports-themed markets, it doesn’t wade into some of the more hotly contested topics, like US elections and the Iran war. That doesn’t mean it’s avoiding controversy. As a sports-centered platform, the types of speculation opportunities it offers are at the center of an ongoing regulatory war, with prediction markets and federal regulators on one side and state regulators, tribal authorities, and occasionally traditional sportsbooks and casino operators on the other. Dozens of messy legal battles are raging across the US. States are suing Kalshi and other platforms, alleging that they illegally offer gambling; Kalshi is suing right back; the Commodity Futures Trading Commission, which oversees the industry, is suing several states, arguing that it alone has jurisdiction over these markets.
Also, Novig isn’t immune to the general cultural distaste for prediction markets; when the New York Mets announced a recent partnership with Novig, the baseball team received a flood of criticism on social media. Sample post: “This is vile.”
If sports-related event contracts offered by prediction markets are banned, big players like Kalshi and Polymarket will be in deep trouble, with the majority of the action on their services gone. But Novig’s position is even shakier, since that’s all it does.
Fortinsky is betting it all on a win, and Novig wasted no time jumping into the legal fray. Within three days of launching, the startup sued New York, Massachusetts, New Mexico, and Washington, all states that have taken an aggressive approach to curbing prediction markets. It is trying to block these states from attempting to apply their gambling laws to federally regulated exchanges, which is what it’s licensed as. Sports betting attorney Daniel Wallach tells WIRED that these complaints are a “great marketing strategy” and a way to announce that Novig has arrived on the scene.
Whether they’ll be successful is another matter. Recent court decisions have largely swung toward state attorneys general. A judge in New York denied Novig’s efforts to get a temporary restraining order, on the grounds that doing so would undermine another decision already reached in a case against Kalshi. “It’s increasingly looking more positive for the states,” Wallach notes. But that could change; Wallach and other onlookers expect the fight to get kicked up to the US Supreme Court before anything is definitively resolved.