Novig Taxes 2026: 1099s, Historical Records & Reporting

Last Updated on October 3, 2026 by Patrick Camuso, CPA

Quick Answer

The short answer: Novig taxes in 2026 have to be analyzed by operating period because Novig has operated materially different products under the same brand. Novig began 2024 as a Colorado internet sports betting operator. Later that year, it launched a nationwide sweepstakes product built around Novig Coins and Novig Cash. Then, on August 4, 2026, Novig launched its current real-money sports prediction market product through Ludlow Exchange, LLC, after Ludlow had received designation from the Commodity Futures Trading Commission as a designated contract market, or DCM.

Novig’s Sweepstakes Model and Novig Cash

In a discussion of the company’s pivot, Novig co-founder Jacob Fortinsky described Novig as having begun the year as a regulated Colorado sportsbook before deciding to move to a sweepstakes platform. Under that system, Novig Coins were nonredeemable and used for play, while Novig Cash was a virtual currency used to participate in sweepstakes and could be redeemed for cash prizes subject to the applicable rules. Novig also described Novig Cash as available through free methods of entry or as a bonus associated with certain Novig Coin purchases. Novig formally announced the national rollout of the sweepstakes product on September 4, 2024, describing it as operating under a sweepstakes regulatory framework in 42 states and Washington, D.C. For tax and accounting purposes, those mechanics have to be understood on their own terms.

A sweepstakes-era account can contain purchases, Novig Cash, redemptions, promotional amounts and trading activity.  They are not the account mechanics of today’s Ludlow Exchange product. During the sweepstakes period, Novig distinguishes net redemptions from net trading profit. A reported redemption figure should not be treated automatically as a complete measure of the taxpayer’s economic trading result.

Novig’s current newsroom describes the company as ceasing its Colorado operations before rolling out the sweepstakes product, while the contemporaneous January announcement says the Colorado product was an internet sports betting operation rather than an exchange. For a taxpayer with activity in that transition period, the actual transaction dates and contemporaneous account records are therefore more useful than imposing a reconstructed corporate timeline on the tax file.

What Changed at Novig on August 4, 2026

The CFTC designated Ludlow Exchange, LLC as a DCM on June 16, 2026. The company announced the launch of the new product on August 4, 2026. Novig’s current Help Center now describes the platform as a CFTC-regulated sports prediction market where customers buy and sell real-money event contracts whose values are tied to sporting outcomes. Novig Cash and Novig Coins have been retired, and Novig says remaining Novig Cash balances were converted to USD..

Ludlow Exchange, LLC is the exchange. The current Member Agreement identifies Ludlow as a CFTC-designated contract market. It defines a contract as an approved contract, agreement or transaction formed when two orders for an outcome are matched on the platform. The Member Portal includes information concerning deposits, withdrawals, trades, trading history, member statements, confirmations and communications. The Member Agreement states that Ludlow is not a derivatives clearing organization and that contracts traded on the platform are cleared and settled through the DCO designated by Ludlow. It also says funds deposited in connection with the account are held at the DCO rather than by Ludlow. The Rulebook similarly states that Ludlow does not hold or invest member funds. Novig’s current clearing acknowledgement identifies Bitnomial Clearinghouse, LLC and states that a participating user becomes a clearing member of Bitnomial Clearinghouse. The CFTC lists Bitnomial Clearinghouse as a registered DCO permitted to clear futures, options on futures and fully collateralized swaps.

Ludlow itself says it does not act as counterparty to customer trades. But the Member Agreement also permits Ludlow affiliates, acting as members, to participate as market makers or other traders and to become counterparties to customer trades.

2026 Recordkeeping

A taxpayer who used Novig before and after August 4 should not begin by looking for one annual Novig profit number. For historical activity, Novig now provides a specific in-app process under Account Preferences → Request Historical Data. Novig says the resulting request provides trading and payment activity from before August 4, 2026 and that the file will be delivered by email. The current historical-data page refers parenthetically to the entire pre-August 4 period as the period when Novig operated under the sweepstakes model. That works reasonably well for 2025 and the first part of 2026. It does not accurately describe all earlier Novig activity because the contemporaneous Colorado records establish a separate sportsbook product at the beginning of 2024.

For post-August 4 activity, the current Ludlow records include trading history, statements, confirmations, deposits and withdrawals. Those are the records from which current event-contract activity should be reconstructed. Our broader Prediction Market Accounting Guide addresses why platform transaction records are essential source data without automatically being a complete tax workpaper or general ledger.

Does Novig Send a 1099?

Novig currently publishes two pieces of tax-document guidance that need to be kept separate.

Its Help Center states that Novig issues Form 1099-MISC when both of the following conditions are met:

• total annual redemptions are at least $2,000; and
• net redemptions, defined by Novig as total redemptions minus total purchases, are greater than zero.

The same page says the form reports net redemptions rather than net trading profit and expressly describes that approach as the standard reporting method for sweepstakes platforms.

The current Ludlow Member Agreement is different. It states that Ludlow will furnish IRS Form 1099 and other tax-reporting documents, where applicable, and that those tax statements will generally be made available through the Member Portal or email by January 31. But the agreement does not identify one universal Form 1099, state a $2,000 event-contract threshold or adopt the sweepstakes-era net-redemption calculation for current Ludlow trading. For broader reporting issues, see our Prediction Market Tax Reporting guide.

Information reporting and federal income-tax characterization are separate questions. A Form 1099 tells us what a payer reported under its information-reporting process. It does not necessarily establish the federal tax character of every transaction underlying the amount.

How Current Novig Contracts Settle

The current Novig product has more than one way for an economic position to end.

For an ordinary binary contract held through a determinable result, Novig describes the basic mechanics as contracts trade between $0 and $1, and a winning contract can settle at $1 while a losing contract settles at $0, subject to the applicable contract terms. A position can be sold before the underlying event resolves. Opposing positions can create an early payout. An affected contract can receive Fair Value Settlement. Combination contracts have their own treatment for voided legs. And in limited circumstances a trade can be treated as void from inception.

Novig currently allows eligible straight positions to be sold before the event concludes. The interface presents that as a single Sell action, but Novig explains that the underlying mechanism closes the position by placing an offsetting order on the opposing side. The transaction history can therefore contain the original transaction, an offsetting transaction, price-improvement entries and the Sell entry that ties the activity together.

At high volume, these interface-versus-transaction distinctions can become material. A user-facing portfolio is designed to make the trading experience understandable. It is not necessarily the final representation required for the books or tax workpapers.

Novig also has an Early Payout mechanism, sometimes described in the account as Realized PnL. An Early Payout can arise when a user holds opposing positions whose combined economics guarantee a minimum payout regardless of the eventual outcome. Novig says the guaranteed portion can be credited immediately while the remaining contingent amount continues through the ordinary settlement process. It expressly distinguishes this from selling a position. The receipt of the early cash amount does not necessarily mean every contract involved has been extinguished. The remaining position and later settlement still need to be accounted for.

Current Novig contracts can also use Fair Value Settlement, or FVS. Novig says FVS applies when a contract can no longer produce a normal YES or NO outcome or when the contract terms otherwise call for settlement at fair value. Instead of unwinding the original trade, Novig determines a Fair Value Price using specified market information from immediately before the disrupting event became known. YES and NO positions then receive settlement values based on that price.

Ludlow’s Rulebook provides additional settlement mechanics for combination contracts. If no leg settles contrary to the specified direction but one or more legs is voided, cancelled, postponed beyond the applicable period or otherwise cannot settle in its specified direction, the Rulebook provides a valuation mechanism for those legs in determining the settlement of the combination contract. It expressly states that the combination contract is not automatically voided, cancelled or refunded merely because it contains a voided leg.

Novig Fees Under the Current Product

Current Novig fees also belong to the current Ludlow period rather than the historical sweepstakes model.

As of October 3, 2026, Novig’s published schedule shows no maker trading fee. Pre-game straight trades on the app and website are also currently fee-free to takers. Certain live, futures and parlay transactions carry price-dependent taker fees based on the contract price and number of contracts, with different coefficients for different trade types and certain market-specific exceptions. Novig says fees are charged when a qualifying trade actually executes rather than merely when an order is placed or cancelled.

Those mechanics can become significant for an active trader because the economic result is not limited to contract purchase price and settlement proceeds. Fees may attach to particular executions and need to remain identifiable in the underlying records.

Maker Credits and Professional Liquidity Programs

Novig’s Maker Credit Program adds another current-period payment stream. The program began September 10, 2026. Under its current terms, qualifying maker fills in eligible live markets can earn a cash credit equal to 50% of the corresponding live taker fee actually collected by Novig. Qualifying fills in eligible futures markets can earn 70% of the applicable futures taker fee. Novig says the credits are generally posted as cash within seven calendar days. The current terms exclude exchange affiliates and members that have executed a separate Market Maker Agreement. Ludlow’s Rulebook separately permits designated market makers to receive financial benefits, reduced fees and other program-specific benefits in exchange for their obligations.

The label “credit,” “rebate” or “incentive” does not by itself answer whether the amount is a fee adjustment, separate payment or another tax item. Our analysis of prediction-market maker rebates, liquidity incentives and platform payments.

Novig’s Portfolio Balance Is Not a Tax P&L

Novig says its Portfolio Balance consists of three components which are Wallet Balance, Open Positions and Trade Credits. The open-position component reflects current market value rather than original cost, so it changes as market prices move. Trade Credits are also included in Portfolio Balance even though they are not withdrawable cash.

A taxpayer’s Portfolio Balance can change because an unsettled position changed in value. It can also include promotional value that is not cash. Neither fact establishes what the taxpayer has realized for federal income-tax purposes. For an entity, the same distinction applies to the books. A platform dashboard can measure account economics without constituting the entity’s general ledger.

Our Prediction Market Accounting Guide addresses that distinction in more detail.

What Records Should You Keep for Novig Taxes?

The recordkeeping should follow the product that generated the activity. For early 2024, preserve the native Colorado sportsbook records and the exact transaction dates. The contemporaneous evidence establishes that Novig was operating as an internet sports betting operator rather than an exchange. For the sweepstakes period beginning September 4, 2024, preserve the historical trading and payment data along with the underlying Novig Cash activity, purchases, redemptions, promotions, voids and any tax forms actually received. A net-redemption number should not be substituted for a complete transaction record simply because Novig used it for an information return. For 2026, preserve the year as a cutover year. Keep the historical pre-August 4 records separate from the Ludlow activity beginning August 4. Preserve the Novig Cash-to-USD conversion as part of that bridge between the two systems.

For current Ludlow activity, the records should be sufficient to explain material executions, open and closed positions, sales, Early Payouts, ordinary and nonstandard settlements, deposits and withdrawals, fees, Maker Credits or other incentive payments, promotional Trade Credits and the year-end tax statements ultimately furnished. The purpose is to maintain a transaction record that still explains the reported result after the data has been normalized for accounting and tax work.

Novig Taxes for Professional Traders and Market Makers

A lower-volume taxpayer may have a manageable number of positions and settlement events. A professional trader or market maker can have many fills, partial executions, both maker and taker activity, positions carried across reporting dates, APIs, fee and incentive programs, entity-level books and activity across multiple prediction-market venues.

The records may need to distinguish trading activity, positions, cash, execution fees, incentive payments and other material items before the tax treatment can be applied consistently. Our Prediction Market Tax Guide for Market Makers, Professional Traders & Trading Firms addresses those participant-level questions separately.

When Novig Tax and Accounting Help Becomes More Relevant

The work becomes more substantial when the taxpayer used Novig under more than one operating model, a 2026 account crosses the August 4 cutover, historical records do not reconcile to the tax form received, current activity contains significant sales or nonstandard settlements, fees and incentive payments are material, the trading occurs through an entity, or Novig is one venue within a larger professional operation. In those situations, the immediate issue is often n whether the underlying activity has been reconstructed well enough for the tax return to be supportable.

Our Prediction Market Tax Reporting practice addresses the filing and reporting side of that process, while Prediction Market Accounting addresses transaction records, reconciliation and the accounting layer supporting year-end reporting.

The Bottom Line on Novig Taxes

Novig is a good example of why prediction-market tax reporting should begin with the underlying transaction rather than the platform name. The Novig brand has covered a Colorado internet sports betting product, a nationwide sweepstakes model using Novig Coins and Novig Cash, and now a CFTC-regulated event-contract exchange operated through Ludlow Exchange.

Frequently Asked Questions About Novig Taxes

Does Novig send a 1099?

Novig currently maintains a Help Center page stating that it issues Form 1099-MISC when annual redemptions are at least $2,000 and net redemptions are positive. That page expressly describes a sweepstakes model based on purchases and redemptions. The current Ludlow Member Agreement separately provides for IRS Form 1099 and other tax-reporting documents but does not identify one universal post-August 4 form or threshold. Those two pieces of guidance should not be treated as though they describe the same product.

How do I get my historical Novig records?

Novig says users can request trading and payment data from before August 4, 2026 through Profile → Settings → Account Preferences → Request Historical Data. Novig then emails the historical data. Users with early-2024 activity should preserve the transaction dates because the current page describes the historical period broadly as sweepstakes activity even though contemporaneous records establish a separate Colorado sportsbook product at the beginning of 2024.

Why is August 4, 2026 important for Novig taxes?

August 4 is the supported operational cutover to Novig’s current Ludlow Exchange product. Ludlow received its CFTC DCM designation earlier, on June 16. The regulatory designation date and the customer-product launch date answer different questions and should not be treated as interchangeable.

Is selling a Novig position the same as getting a refund?

No. Novig says Selling a Position closes eligible exposure by placing an offsetting order on the opposing side. The transaction history can therefore contain multiple underlying entries even when the Portfolio presents one Sell amount.

Is a voided Novig contract always refunded?

No. Under current mechanics, a contract can be subject to Fair Value Settlement rather than a return of the original amount paid. Ludlow’s Rulebook also contains separate treatment for voided legs of combination contracts, indeterminate settlement outcomes and trades treated as void from inception. The applicable contract and actual settlement record control.

Does trading on Ludlow Exchange automatically qualify for Section 1256?

No. Ludlow’s DCM designation is relevant because a domestic CFTC-designated contract market is a qualified board or exchange under Section 1256. That fact alone does not establish that every Ludlow contract falls within one of the contract categories covered by Section 1256 or satisfies the other requirements applicable to that category.

Is Novig’s Portfolio Balance taxable income?

Not by itself. Novig says Portfolio Balance includes available wallet cash, the current market value of open positions and Trade Credits. Because the number can include unrealized market movements and promotional value that is not withdrawable cash, it is not a filing-ready measure of taxable income.