Novig Raises $75M, Positions CFTC-Regulated Exchange as Future of Sports Betting
Sports prediction market platform Novig has raised $75 million in Series B funding led by crypto funding agency Pantera Capital, a transfer that comes as the corporate pushes towards federal regulatory approval that would permit nationwide operation below monetary market oversight slightly than state sportsbook licensing or sweepstakes-style working fashions.
“Our mission is to democratize and financialize sports activities markets, and we’re proud of the truth that Novig customers are 10 instances extra more likely to win than on conventional sportsbooks,” Novig CEO Jacob Fortinsky stated in a information launch saying the funding. “We selected to accomplice with the most effective crypto enterprise corporations on this planet to additional speed up our plans to make Novig essentially the most environment friendly and liquid sports activities prediction market on this planet.”
“Others are utilizing prediction market know-how to financialize new markets with unproven demand,” Fortinsky added. “We leverage it to repair damaged markets the place demand already exists.”
The spherical additionally included Multicoin Capital, Makers Fund, and Edge Equity, plus returning buyers Forerunner, Perceptive Ventures, and NFX. Novig says whole capital raised since launch now exceeds $105 million.
Forbes reported the Series B funding valued Novig at roughly $500 million post-money.
Regulatory submitting places Ludlow Exchange on the middle of Novig’s enlargement plan
Novig’s funding information comes on the heels of a regulatory improvement that would matter greater than the capital itself. As DeFi Rate previously reported, a Novig-linked entity, Ludlow Exchange, not too long ago entered the Commodity Futures Trading Commission (CFTC) portal with an software to grow to be an permitted Designated Contract Market, a federal trade designation that may permit Novig to checklist occasion contracts for buying and selling nationwide below CFTC regulation.
“We have submitted our software to the CFTC and are diligently working to make the transition to be out there to Americans in each single state,” Fortinsky wrote in a prolonged X publish saying the funding spherical.
Fortinsky has indicated the corporate hopes that approval may come comparatively shortly. He instructed the Sports Business Journal that Novig plans to part out its sweepstakes providing and transition to a completely CFTC-regulated prediction market inside roughly six months, pending approval. That timeline stays unsure, nevertheless it alerts rising confidence inside the corporate that prediction markets tied to sports activities occasions could finally safe clearer federal footing.
Investors forged sportsbooks as flawed, again exchange-style different
Some buyers framed their backing of Novig partially as a critique of present sportsbook market construction, arguing prediction markets supply a extra environment friendly different.
Pantera has invested broadly throughout the crypto sector, together with exchanges like Coinbase, blockchain networks such as Solana, and decentralized finance tasks. How that crypto focus finally matches with a sports activities prediction market platform like Novig stays unclear.
Pantera investor Mason Nystrom framed the Novig funding round sports activities betting market construction.
“Prediction markets have gone mainstream. But we ought to be trustworthy about why,” Nystrom wrote on X. “Sports betting accounts for the overwhelming majority of prediction market quantity, upwards of 90% on some main platforms.”
Nystrom argued conventional sportsbooks symbolize flawed market design.
“All of this successfully quantities to a nasty market construction with a heavy tax on participation,” he wrote, including that prediction markets supply “a peer-to-peer market with international liquidity,” “higher odds,” and “a market with out exploitative vigs.”
Pantera’s involvement, together with backing from different crypto-focused buyers like Multicoin Capital, displays enterprise curiosity in exchange-style betting fashions that extra intently resemble monetary markets than conventional sportsbooks. Multicoin funding accomplice Shayon Sengupta echoed that evaluation.
“An trade is, from first ideas, a strictly superior market mechanism for sports activities betting,” Sengupta wrote. “Allowing a number of market makers to face a given taker produces deeper liquidity and tighter spreads throughout tens of hundreds of markets than a single counterparty mannequin.”
Prediction markets mark newest regulatory pivot for Novig
Novig’s transfer into federally-regulated prediction markets would mark one other strategic pivot for the corporate. Novig initially explored working as a state-licensed, real-money sports activities betting trade earlier than switching to a sweepstakes-style mannequin that allowed broader U.S. entry with out conventional sportsbook licensing. The Ludlow Exchange submitting now alerts a 3rd part, as the corporate seeks a nationwide framework that would supply extra regulatory readability and scalability than both earlier method.
Like its buyers, Novig has framed the federal prediction market push as greater than a regulatory workaround, positioning it as an alternative as a structural enchancment to sports activities betting itself. In his announcement publish on X, Fortinsky argued that sports activities prediction markets can higher align pricing, liquidity, and incentives than sportsbook fashions, which usually depend on fastened odds and bookmaker spreads.
“We consider we’re at the start of a a lot bigger paradigm shift,” he wrote. “Sports betting and monetary markets are converging, and prediction markets are evolving into true buying and selling platforms formed by the identical ideas that energy trendy exchanges: transparency, effectivity, liquidity, and equity. That’s precisely what the following era of merchants count on, and precisely what Novig was constructed to ship from day one.
Fortinsky touts trade mannequin as scrutiny of sports activities markets continues
DeFi Rate has reached out to Novig in search of clarification on whether or not the trade would develop past sports activities markets into different prediction classes. This story will probably be up to date if the corporate responds.
A sports-heavy focus carries some threat. Prediction markets tied to sports activities occasions have already drawn scrutiny from regulators and gaming stakeholders in a number of states, elevating the likelihood that even federally-regulated platforms may face localized restrictions in sure jurisdictions.
Despite these unresolved regulatory questions, Fortinsky argued in his X publish saying the funding that prediction markets supply a greater expertise for bettors and merchants than conventional sportsbooks.
“At Novig, we consider the longer term of sports activities betting is trader-first, trusted, and clear,” Fortinsky wrote. “We consider markets — not casinos — ought to set costs. And we consider sports activities prediction markets ought to be as truthful and environment friendly as any trendy monetary trade.”
“Whether you like sports activities betting or hate it, it’s right here to remain. It’s authorized, nationwide, and culturally embedded,” he added. “The query isn’t whether or not the market will exist; it’s whether or not it should lastly work for the individuals who take part in it.”
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