Novig challenges Wisconsin gambling laws in federal court

Ludlow Exchange LLC, operating as Novig, filed a 45-page complaint in the U.S. District Court for the Western District of Wisconsin on August 14. The suit names Attorney General Josh Kaul and state gaming administrator John Dillett as defendants. Novig is pushing for preliminary and permanent injunctions, contending that the Commodity Exchange Act preempts Wisconsin’s commercial gambling laws regarding its event contracts.

Novig’s legal strategy relies on its June 16 designation by the CFTC as a contract market, which the company claims places its transactions outside the reach of state enforcement. However, the company enters this fight against an unfavorable backdrop. In July, Judge William Griesbach denied a request from the CFTC to stop Wisconsin from pursuing similar enforcement actions against other platforms, including Kalshi and Polymarket, ruling that the federal agency failed to demonstrate a sufficient likelihood of success on its preemption claims.

Since August 4, Novig has initiated parallel litigation in New York, Massachusetts, Washington, and New Mexico to secure its expansion. The company has requested expedited consideration in Wisconsin, citing what it describes as an "imminent and existential" threat to its operations. State officials have yet to file a substantive response, and the court has not issued a ruling on the requested injunction.