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A federal judge in Wisconsin has denied the Commodity Futures Trading Commission’s request for a preliminary injunction that would have stopped the state from enforcing its gambling laws against prediction market operators, a setback for the federal agency as Wisconsin’s cases against several platforms continue.
Judge William Griesbach of the U.S. District Court for the Eastern District of Wisconsin ruled that the CFTC had not shown it was likely to succeed on the merits, would face irreparable harm, or met the balance of equities needed for preliminary relief. The court also found the agency had not shown that sports event contracts at issue were likely to qualify as swaps under the Commodity Exchange Act.
Wisconsin has alleged that sports event contracts offered through platforms including Kalshi, Polymarket, Crypto.com, Robinhood, and Coinbase amount to unlicensed sports betting under state law. In the ruling, Griesbach wrote that “Wisconsin’s gambling statutes do not conflict with federal commodities regulations and are not preempted by them.”
The court also rejected requests from Kalshi and Crypto.com to intervene and seek preliminary relief in the federal dispute.
For prediction market users, the decision does not itself resolve whether the contracts are lawful in Wisconsin, but it does allow the state’s enforcement effort to keep moving while the broader jurisdiction fight continues. Wisconsin Attorney General Josh Kaul has argued the contracts are sports bets presented as financial products, saying when the lawsuits were announced in April that “thinly disguising unlawful conduct doesn’t make it lawful.”
The case is part of a wider conflict over whether sports-related prediction contracts should be governed primarily by federal commodities rules or by state gambling laws. According to the source report, attorneys general from 44 states have urged the CFTC to withdraw and rewrite proposed amendments to Rule 40.11, writing that states have long regulated gambling, including sports betting.
The CFTC plans to appeal. Another court fight could also shape the issue: a separate ruling in Minnesota temporarily blocked that state’s new prediction market ban after finding the CFTC, Kalshi, and Polymarket were likely to succeed on preemption grounds.
For now, the Wisconsin ruling suggests state-level enforcement remains a live risk for prediction market platforms offering sports event contracts in the U.S.
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Source: As reported by crypto.news.
