Novig Lane Change From Regulated Sports Betting To Sweepstakes: It’s A No-Brainer

Five months after shutting down operations in Colorado’s regulated sports betting market, Novig has left that explicitly licensed lane to offer a sweepstakes sportsbook across the U.S. — in 42 states plus Washington, D.C.

While the U.S. sweepstakes industry has come under heavy scrutiny in recent months, this move still feels like a no-brainer for Novig.

The regulated market just wasn’t right for Novig, nor was its path there sustainable.

The Silicon Valley-backed (to the tune of a $6.4 million seed round) platform said it wanted to “democratize” sports betting by allowing gamblers to set their own odds. But Colorado regulators weren’t on board. Novig’s exchange betting system never got the green light.

So, Novig closed its doors in Colorado just three months after its January launch. It doesn’t take an expert to read between the lines that Novig also likely struggled to make a financial dent in those three months in a sports betting market that has become extremely top-heavy. There is little room for niche operators in this low-margin business — even operators with outside-the-box ideas like Novig.

That’s why the departure to an unregulated sweepstakes market makes a lot of sense.

Same odds opportunity, different setting

First, Novig can now offer the democratized experience of its dreams without waiting for state-by-state regulator approval.

Novig users can play with Novig Coins or Novig Cash — which follow the exact same format at Gold Coins and Sweeps Coins on sweepstakes casino sites — while setting their own odds. Novig Coins are purely in-game tokens. Novig Cash, meanwhile, like Sweeps Coins, can be redeemed for cash prizes.

Currently, Novig offers moneyline, spread, totals, and player props for NFL, NBA, WNBA, college football, college basketball, and MLB.

In a release announcing its sweepstakes app last week, it said it also plans to add parlays, SGPs, futures, more sports, and a web-based trading interface to its platform by late 2024 or early 2025.

Instant access to 43 US markets

Second, Novig, basically with the snap of a finger, is now instantly available to anyone older than 21 in 42 states and D.C. (It’s only available as an iOS app right now but it’s working on an Android app.) Realistically, Novig could never get that type of widespread access for regulated sports betting. It would cost way too much and take way too long.

The only states in which Novig isn’t available are Alabama, Colorado, Idaho, Louisiana, Michigan, Montana, Nevada, and Tennessee.

Of the 43 active markets, 17 are states that don’t currently offer any regulated online sports betting. Novig can immediately fill a void for sports fans in those states looking to put some action on the games they’re watching.

Sweepstakes gaming currently faces no regulation, unlike real-money gaming. Some states are starting to push back against sweeps operators, arguing Sweeps Cash gameplay is, for all intents and purposes, the same as real-money wagering.

And the American Gaming Association recently came out in strong opposition to sweeps operators and urged lawmakers to require them to face regulation.

“Where state laws and regulations are not clear,” the AGA’s policy statement on sweeps operators reads, “legislatures should consider enacting legislation to prevent unlicensed operators from exploiting loopholes in sweepstakes regulations to offer online real money gambling.”

But, for now, that’s just noise. And sweeps operators across the online betting marketplace — including Chumba Casino and LuckyLand Slots in iGaming, and Fliff and now Novig in sports betting — can currently benefit from widespread access. 

“Players are fed up with having to play on apps where the house always wins and the odds are stacked against them. On Novig, 43% of users are profitable — compared to an industry average of 3% — and we’re the first app to offer a commission-free sports prediction market,” Novig CEO Jacob Fortinsky said in a statement. “We were overwhelmed by how well we did in Colorado, and we’re beyond excited to now be able to offer our revolutionary app to sports fans nationwide.” 

Sweeps operators: $142 annually per user

A 2024 Morgan Stanley financial analysis found regulated online casino platforms reported an average of $387 in revenue per user while sweepstakes casino platforms had $142 in annual revenue per user.

Granted, that is not an insignificant difference. Consider, though, that real-money iCasino is legal in just seven states. Meanwhile, just a small handful of states don’t allow sweepstakes gaming, leaving operators like Novig a drastically larger potential revenue pool.

A prominent name in U.S. gambling also recently made the switch from the regulated market to the sweepstakes sector.

Jon Kaplowitz, the former head of PENN Interactive, now runs Clubs Poker, a new sweepstakes poker site that is available in 45 states. It’s establishing itself as the main social poker alternative to Global Poker, which has had close to a monopoly on that space.

And then there’s ProphetX, the new sweepstakes arm of peer-to-peer platform Prophet Exchange. Like Novig, Prophet was operating in one regulated market and instantly became available in about 40 more states.

Novig’s move is not an outlier. It’s part of a trend — one that the entire industry, regulated and otherwise, should be paying close attention to.