Ludlow Exchange, LLC recently appeared in the Commodity Futures Trading Commission’s (CFTC) industry filings portal as a pending Designated Contract Market (DCM) applicant, according to the agency’s public listings. The filing is notable because Ludlow’s application materials list Novig as its holding company, linking the proposed exchange to a platform that has operated a peer-to-peer sports prediction product using a sweepstakes-style model. In August, after Novig announced the close of an $18 million Series A funding round, the company’s co-founder and CEO Jacob Fortinsky, who signed the Ludlow Exchange’s ‘Form DCM’ and is listed as its founder and CEO, told InGame that CFTC approval and Novig’s current sweepstakes operations would not necessarily be ‘mutually exclusive.’ Novig officials have not publicly commented on what the new exchange could offer or how closely it would be integrated with Novig’s existing business.
DeFi Rate has reached out to Fortinsky for comment. While the CFTC filings do not describe Ludlow’s proposed markets, the exchange’s rulebook and ‘compliance with core principles’ filing outline a structure that closely resembles other event-contract exchanges that have sought or received CFTC approval. It intends to offer binary contracts (i.e., Yes/No positions) and ‘combination contracts’ that depend on multiple outcomes (like parlays or ‘combos’). A fully collateralized trading model, with no margin or leverage.
An internal Outcome Review Committee empowered to determine final market outcomes for settlement. Ludlow says it does not intend to offer intermediated trading, like through third-party FCMs. The documents reference clearing contracts through a clearinghouse, but Ludlow is not pursuing Derivatives Clearing Organization (DCO) registration and does not identify a clearing partner. That structure mirrors other recent DCM applicants that rely on third-party clearing operators.
DraftKings’ in-the-works DCM, Railbird Exchange, for example, disclosed in its filings plans to rely on third-party clearing, with Polymarket Clearing (formerly QC Clearing) designated as its clearinghouse. In the Ludlow Exchange DCM filing, initial contract categories are not outlined and there are no explicit references to sports event contracts. But given Novig’s experience and established user base, it seems likely that sports will at least be a part of any potential new platform. The filings reference ludlowexchange.com as a possible destination for the DCM-approved platform.
There is minimal information currently available on the site. The appearance of a Novig-linked DCM filing comes as the company’s state-by-state availability has narrowed. Novig initially pursued a fully licensed sportsbook model, launching a real-money betting app in Colorado in 2024 before exiting the state after regulators declined to approve its planned exchange structure. Later in 2024, Novig pivoted to the sweepstakes model and launched in 42 states.
Novig operates using a dual-currency system in which users can acquire free ‘sweepstakes’ currency (Novig Cash) alongside a separate, non-redeemable currency (Novig Coins). Novig Cash can be obtained through promotions, with the purchase of Novig Coins, or via mail-in requests, and can be redeemed for cash prizes. By structuring its platform as sweepstakes gaming, Novig positioned itself outside of traditional gambling frameworks. But the model has increasingly drawn scrutiny from state regulators, with several states moving to prohibit sweepstakes-based gaming platforms.
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