Novig is responding to recent legislative changes in New Jersey regarding online sweepstakes and dual-currency systems.
The sports prediction market exited New Jersey’s gaming market after Gov. Phil Murphy signed a piece of legislation into law banning the operation of sweepstakes casinos and any form of online gaming with a dual-currency system. Novig ceasing operations in the Garden State comes after the company recently received a fresh injection of capital.
Novig notified customers of its intention to leave New Jersey through a series of emails attributing its exit to the new law taking effect.
The prediction market offers users two gaming options: Novig Coins and Novig Cash. New Novig users receive a balance of each after registering with the platform with Novig Coins used for free-to-play gaming. The platform’s Novig Cash can be redeemed for real cash prizes. According to data from Novig, more than 50% of its trades derive from peer-to-peer operations.
New Jersey implements online sweepstakes ban
In addition to prohibiting the operation of sweepstakes and dual-currency systems, the new law also bans their promotion and is expected to impact affiliates and influencers.
Penalties for violating New Jersey’s new law include fines of up to $25,000 for each violation for entities that fail to comply with cease and desist orders. The orders are issued by the state’s Division of Gaming Enforcement and Division of Consumer Affairs.
Governors in Connecticut and Montana have also recently signed online sweepstakes bans into law. Novig continues to operate in Connecticut but never launched in Montana.
SBC Americas reached out to Novig for comment on its New Jersey exit and will update this story if a response is received. It is unclear what Novig’s plans are in Connecticut.
Novig closes funding round
Novig is leaving New Jersey after closing a $18 million Series A funding earlier this month.
The funding round was led by venture capital firm Forerunner with contributions from existing investors Y Combinator, NFX, Perceptive Ventures and Gaingels. It follows a $6.4 million funding round in August 2023 that allowed Novig to make its first foray into the U.S. gaming industry as a standard sportsbook operator. Novig would later change its business model to a prediction market and sweepstakes offering amid a shift in strategy.
