Contest forecasting platform Novig aims for CFTC accreditation following $18 million fundraising round
US-Based Novig Secures $18 Million in Series A Funding for Expansion
In a recent announcement to InGame, the co-founder of Novig revealed that the company has raised $18 million in a Series A funding round. This round was led by Forerunner, with existing backers Y Combinator, NFX, Perceptive Ventures, and Gaingels also participating.
Novig, a sports prediction market based in the United States, currently operates under a sweepstakes model. The company aims to launch real-money betting markets, but due to regulatory complexities, it cannot operate simultaneously with both CFTC certification and a sweepstakes model.
CFTC certification applies to certain lawful prediction markets regulated at the federal level, focusing on derivatives and exchange-traded events, including some sports predictions. On the other hand, the sweepstakes model avoids traditional gambling licensing by operating using virtual tokens and skill-based contests that meet sweepstakes legal criteria, avoiding direct wagering of real money.
States like New Jersey have banned sweepstakes gambling sites, including Novig’s dual-currency sweepstakes model, forcing the company to withdraw despite its continued pursuit of a regulated approach. The legal gray area caused by this dual-currency sweepstakes approach has led to regulatory scrutiny and market exits.
Novig's services involve sports prediction markets, and the company's funding will be used to expand its services. However, the business did not provide further details about the use of funds.
This funding was announced on Monday, making Novig the latest prediction market to raise money in recent weeks. The company's aim to obtain Commodity Futures and Trading Commission (CFTC) certification is a clear indication of its ambition to move towards a more regulated model.
[1] Novig Exits New Jersey Due to Sweepstakes Gambling Ban [2] Novig Faces Legal Challenges in US States [3] The Legal Gray Area of Novig's Dual-Currency Sweepstakes Model [4] CFTC Oversight and Prediction Markets: A Regulatory Overview [5] The Impact of Sweepstakes Gambling Bans on Novig's Operations
- With the recent $18 million Series A funding, Novig, an American sports prediction market, aims to utilize the funds for expanding its services, despite facing legal challenges due to a regulatory gray area surrounding its dual-currency sweepstakes model.
- As Novig seeks to launch real-money betting markets, its ambition to obtain Commodity Futures and Trading Commission (CFTC) certification signifies a move towards a more regulated model, yet the company has been forced to withdraw from states like New Jersey due to sweepstakes gambling bans.
- Navigating the legal landscape has been a challenge for Novig; the company currently operates under the sweepstakes model, but the complicated nature of CFTC regulation and ongoing legal scrutiny presents hurdles for entering other markets, such as sports-betting.
