In an opinion yesterday, Judge McMahon denied a preliminary injunction to the online exchange that does business as Novig and that sells “event contracts” tied to sporting events. Novig sued the New York Attorney General and the State Gaming Commission to stop them from enforcing New York’s gambling and mobile sports-wagering laws against it. New York had already moved against other operators of these markets, including Kalshi, Coinbase, and Gemini.

Novig’s theory was preemption. The CFTC has “exclusive jurisdiction” over swaps traded on designated contract markets. It defines swaps to include contracts that depend on an “event or contingency associated with a potential financial, economic, or commercial consequence.” Judge McMahon held that Novig’s contracts likely are not swaps, so New York may require Novig either to get a state gambling license or to stop listing the contracts.

The court’s analysis tracks a split that has opened among the courts of appeals this year: the Third Circuit held that sports event contracts are swaps and that the CEA preempts New Jersey’s gaming laws as applied to them, but the Ninth and Sixth Circuits ruled the other way.

In the Second Circuit, a motions panel on November 3 denied injunctions pending appeal in three appeals heard together: two by Kalshi and one by Coinbase. The panel said only that the appellants “failed to make the required showing” for an injunction.  Two of the appeals are from cases in Connecticut, and the third arises from a ruling from Judge Torres, which aligns with Judge McMahon’s ruling.