Michigan Federal Judge Rules Sports Prediction Markets Are Not Under CFTC Purview
A federal judge in Michigan denied Polymarket’s request for a preliminary injunction against state regulators and ruled that sports-related prediction market wagers are not swaps under CFTC jurisdiction. Judge Paul L. Maloney said Polymarket is unlikely to win on the merits and rejected the company’s claim that its sports wagers fall under federal derivatives law. He warned that Polymarket’s reading of derivatives would wrongly extend federal control into areas traditionally handled by states. The ruling cuts against the CFTC’s recent push, backed by the Trump administration, to treat prediction markets as federally regulated under Dodd-Frank. Similar disputes are playing out nationwide, with mixed outcomes in federal courts. The Sixth Circuit will soon review the issue, and the Supreme Court may ultimately resolve the conflict between state gambling laws and federal derivatives regulation.
