How Novig became the third biggest prediction market site despite launching only months ago

Since bursting on the scene two years ago, prediction markets have become one of the buzziest new sectors in finance, pulling in billions of dollars in revenue, and driving daily news headlines. The young industry is dominated by two giants, Kalshi and Polymarket, but numerous other companies are trying to muscle into the field. That includes the sports-focused prediction market Novig, which only launched as a federally regulated prediction market in August, but has already claimed the number three spot by one widely used industry metric.

Over the past 30 days, Novig handled $1.8 billion in trading volume on U.S.-regulated exchanges, according to the PM Pulse, a newsletter that tracks prediction market volume using data from research firm Aldrin. That figure is small next to Kalshi’s $33.3 billion and Polymarket U.S.’s $6.3 billion. But it’s about $300 million ahead of Crypto.com, the fourth-place contender, and its volume is up 80% from the previous 30 days.

The volume figures don’t account for combos, or multi-game parlays, which Sam Schwartz, who runs the newsletter, says can inflate volume without producing proportionally more revenue for the exchange. 

Novig’s ascent is notable given how little money it has raised compared to other prediction markets. Founded in 2021, the company enjoyed modest growth and raised $30 million as it pursued a sweepstakes-based business model that allowed it to operate in certain states. But a shift in the legal landscape led Novig this year to become a federally regulated prediction market, helping it raise a new $75 million Series B round in February at a $500 million valuation. The company is also reportedly raising a new round of capital at a $2 billion valuation, though Novig declined to comment on future fundraises. 

While Novig has raised $105 million in total, that figure is dwarfed by Kalshi’s fundraising, which amounts to roughly $3.8 billion across 13 funding rounds, according to Tracxn data, including two $1 billion rounds since May. Polymarket, meanwhile, has raised roughly $3.3 billion across eight rounds, including $1 billion from New York Stock Exchange owner Intercontinental Exchange, and another $1 billion in a round led by Donald Trump Jr.-backed venture capital firm 1789 Capital.

“There are very few companies I think outside of AI that have achieved our level of growth in the span of two months,” Novig cofounder and CEO Jacob Fortinsky told Fortune.

Novig’s explosive growth, which has seen it swell from 20 to 100 employees this year, is due in no small part to Sydney Sweeney. The actress, who is a part owner of the company, starred in a viral ad campaign called “Just Sports” that made Novig a household name for millions. In the 30 days after the campaign launched in September, Novig says first-time deposits rose 362% and mobile app downloads jumped 261%, compared with the 30 days before, according to internal data the company provided. During the rollout, the app briefly hit No. 1 on the App Store’s top free sports apps chart.

Novig’s early success comes at a time when conventional sports betting platforms like DraftKings and FanDuel are diving into the prediction markets industry too, while a host of smaller startups are also fighting to carve out a niche. It has been a difficult race, given how much weight the behemoths pull. Kalshi, which has held the top slot for months, accounts for roughly 64% of trading volume excluding combos over the past 30 days, and Polymarket’s U.S. and DeFi arms together hold about 23%. That leaves just 13% of the market split among the rest of the field, with Novig capturing 3.5% of that—edging out established competitors like Crypto.com and DraftKings’ DKeX platform to claim third place.

Why sports only

Like other prediction markets, Novig makes the case that it offers sports traders a better deal than conventional betting platforms. The company notes that it runs a peer-to-peer exchange where users trade against each other, not against the house, which gives traders tighter prices and lower costs than traditional sportsbooks and most prediction markets.

“That’s the main reason Novig saw growth early as a company—it’s just such a natural draw to the professional and sophisticated users out there… they want to get the best odds possible,” Schwartz explained.

Unlike many of its competitors, the company has zeroed in on the most popular event contract category out there: sports. Much like it marketed in its Just Sports campaign, Novig repeatedly emphasizes that it does not offer trades on politics or pop culture, and that its users must be 21 or older—a distinction from Kalshi and Polymarket, which allow 18-year-olds to bet on their platforms. 

At first glance, focusing only on sports contracts might seem like a missed opportunity for Novig to capture huge, headline-grabbing volume spikes. When the midterm elections arrived, for instance, trading in politics and election contracts on Kalshi reached $729 million on Election Day alone. Over the full week, elections accounted for more than 70% of Kalshi’s volume growth excluding combos, according to data published by the PM Pulse. All of this, of course, resulted in a wave of free marketing since political news reports frequently cited odds on the platform.

But once election week is over, political trading drops off sharply. Schwartz noted that on most other days this year, elections made up less than half of 1% of Kalshi’s daily volume. Sports, on the other hand, are on the calendar nearly every day, and they drive more than 80% of prediction market trading. That steady pace is what Novig is built around.

Limits to growth

While Novig’s low-fee model has succeeded in drawing sophisticated, high-volume traders, it doesn’t appear to be a major factor when it comes to the average retail bettor. “The majority of users out there are not price sensitive,” Schwartz said. Sportsbooks like DraftKings and FanDuel, along with Kalshi, keep winning customers despite charging more.

There is also an ongoing legal battle over the legality of sports-related prediction markets, which is widely expected to land at the Supreme Court next year, and has already led several states to move aggressively against the platforms. So far, state-level restrictions haven’t badly dented growth, but Schwartz said a drawn-out battle could slowly shrink access. Kalshi has already had to shrink its footprint from 50 states to 47 after bans in three states, including Nevada and Michigan, and Schwartz predicts a handful of others may do the same.

The timing of a Supreme Court ruling matters, too. Schwartz called it about a coin flip whether the justices rule in June 2027 or June 2028, and said the court would likely need to take the case by mid-January for a 2027 decision. A longer wait could mean a growing wave of state bans in the meantime.

Some in the industry think access could fall from 47 states to 35 or fewer, Schwartz said, which “will significantly reduce [Kalshi] and prediction market current volume and future volume, especially if they lose some of the bigger, more important states.”

Smaller players, with less market share to fall back on, could feel it even more.

For his part, Fortinsky remains unbothered by the regulatory turbulence and believes that state-level headwinds will not stall Novig’s momentum.

“It’s certainly not an existential risk to the company,” he said. “We are set up to succeed and to crush the incumbents, no matter what the regulatory environment looks like. We have a stronger team, stronger product, and stronger velocity.”

This story was originally featured on Fortune.com