Tölt Strategies has revealed the role it played in helping sports prediction market operator Novig obtain approval from the U.S. Commodity Futures Trading Commission as a Designated Contract Market, offering a rare look into what it takes to launch a federally regulated prediction market in the United States.
The announcement comes one day after Novig began nationwide trading through its newly approved exchange. While the launch itself marked another milestone for the rapidly growing prediction market industry, Tölt’s involvement highlights a development that could prove equally important: regulatory expertise is becoming a competitive advantage as more companies seek federal approval to operate event-based markets.
According to Tölt, Novig’s Designated Contract Market application was among the fastest approvals in the history of the CFTC, enabling the company to launch nationwide under a single federal regulatory framework rather than navigating individual state gaming licenses.
Federal Regulation Changes the Economics of Sports Prediction Markets
Novig is not a traditional sportsbook. Instead, it operates a prediction market where participants trade contracts tied to sporting outcomes under the supervision of the CFTC rather than state gaming regulators.
That distinction has become one of the most significant regulatory developments in U.S. sports wagering over the past two years. Traditional sportsbooks must typically obtain licenses in every state where they operate, comply with separate regulatory regimes and often partner with local casinos. A federally regulated Designated Contract Market, by contrast, operates under one national regulatory framework overseen by the CFTC.
This model has attracted growing interest because it dramatically simplifies expansion while introducing financial market standards around governance, surveillance, reporting and market integrity.
The rapid emergence of prediction markets has also generated tension with state gaming regulators, many of whom argue that contracts based on sporting events resemble sports betting. The industry, meanwhile, maintains that federally regulated event contracts fall within the CFTC’s jurisdiction as derivatives rather than gambling products.
FinanceFeeds has previously covered the regulatory battle surrounding prediction markets, which has become one of the most closely watched issues at the intersection of financial markets and gaming regulation.
Why CFTC Approval Is So Difficult
Obtaining Designated Contract Market status is considerably more demanding than launching a conventional financial technology platform.
Applicants must demonstrate that they satisfy the CFTC’s Core Principles governing exchange operations, including market surveillance, trade monitoring, governance, technology resilience, participant protections, compliance procedures and financial resources. Exchanges are expected to maintain systems capable of identifying market abuse while ensuring orderly trading and operational continuity.
Tölt said it worked closely with Novig throughout the process, helping recruit independent board members, establish governance structures, design compliance controls, prepare regulatory filings and respond to questions from the Commission during its review.
The consultancy also introduced Novig to independent directors Gary DeWaal and Bonnie Litt, both widely recognised within U.S. derivatives regulation and exchange governance.
That level of preparation reflects an increasingly common trend in financial markets. Rather than treating compliance as a legal exercise completed shortly before launch, many firms now build regulatory infrastructure alongside their technology from the earliest stages of development.
Former Regulators Are Becoming Strategic Advisors
The Novig project also illustrates another growing trend across financial markets: companies developing novel products are increasingly turning to former regulators for guidance long before submitting formal applications.
Tölt was founded by Dorothy DeWitt, who previously served as Director of the CFTC’s Division of Market Oversight, overseeing the registration and supervision of designated contract markets. That experience provides practical insight into how exchanges are evaluated, the governance structures regulators expect and the operational controls needed before approval is granted.
The consultancy said its work extended beyond preparing documents. It advised Novig on staffing, internal controls, governance, technology processes and regulatory engagement while helping establish relationships with the Commission during the application process.
As regulatory expectations become increasingly complex across digital assets, tokenisation, perpetual futures and prediction markets, firms with direct regulatory experience are becoming an important part of the industry’s infrastructure.
The same pattern has emerged across tokenisation, stablecoins and digital asset markets, where former regulators frequently advise firms preparing to enter highly regulated sectors.
Prediction Markets Are Expanding Beyond Elections
Prediction markets were once associated primarily with election forecasting, but institutional interest has broadened significantly.
Contracts now cover economic data releases, monetary policy decisions, geopolitical developments and sporting events, while financial technology providers have begun integrating prediction market signals into trading and portfolio management systems.
Earlier this week, TS Imagine announced that it had integrated prediction market data into institutional risk management workflows, allowing asset managers to incorporate market-implied event probabilities into stress testing and scenario analysis.
The convergence of regulated exchanges, institutional technology providers and specialised compliance firms suggests prediction markets are increasingly being treated as a recognised segment of financial market infrastructure rather than a niche speculative product.
Speed Matters Because Competition Is Intensifying
Tölt described Novig’s approval process as one of the fastest in CFTC history, although the firm did not disclose the precise timeline.
The speed matters because competition within regulated prediction markets is accelerating. Kalshi established itself as the sector’s dominant regulated exchange, while other firms are now seeking federal approval to compete across increasingly diverse categories of event contracts.
Launching quickly provides several commercial advantages. Exchanges can establish liquidity earlier, recruit market makers, attract institutional participants and build network effects before competitors obtain approval.
At the same time, regulators continue facing pressure to balance financial innovation with customer protection. Tölt highlighted Novig’s decision to restrict participation to users aged 21 and older as one element of its consumer protection framework.
Dorothy DeWitt, Founder and Chief Executive Officer of Tölt Strategies, said, “Congratulations to Novig on the launch of its DCM sports prediction marketplace. We were honored to play a role in its swift approval by the CFTC and introduction to partners that support the exchange in meeting its obligations.”
DeWitt added, “Novig has achieved two critical and challenging milestones: achieving CFTC approval in record time, and thereafter successfully launching the exchange.”
Elie Mishory, Chief Regulatory and Legal Affairs Officer of Novig, said, “Dorothy and the Tölt team provided critical strategy, tactics, operational know-how and relationships that helped us get approved in record time as well as operate with best practices going forward.”
While the announcement focuses on one consultancy’s role in a successful regulatory application, it also reflects a broader shift taking place across financial markets. As prediction markets move into the regulatory mainstream, success will increasingly depend not only on technology or liquidity, but also on governance, compliance and the ability to satisfy federal market infrastructure standards from day one.
