A federal judge denied Polymarket’s bid for a preliminary injunction, ruling its sports event contracts are not CFTC-regulated swaps and setting up an appeal in the Sixth Circuit next month.
Polymarket suffered an early legal setback in its challenge to Michigan state regulators after Federal Judge Paul L. Maloney denied the platform’s request for a preliminary injunction. The judge ruled that sports prediction markets are not CFTC-regulated swap contracts and said Polymarket is unlikely to prevail on the merits, a finding that weakens the company’s effort to block Michigan’s limits on its sports event contracts while the case proceeds. The dispute is set to move to the Sixth Circuit next month and could ultimately reach the Supreme Court, raising the stakes for how U.S. courts draw the line between state gambling restrictions and federally overseen event-based markets.