Wisconsin Court Rejects CFTC Injunction
A federal judge has denied the Commodity Futures Trading Commission’s request to block Wisconsin from enforcing state gambling laws against federally regulated prediction market platforms. Judge William Griesbach of the U.S. District Court for the Eastern District of Wisconsin rejected the CFTC’s motion for a preliminary injunction on July 29, 2026.
The CFTC filed the federal case in April after Wisconsin sued Kalshi, Polymarket, Crypto.com, Robinhood, and Coinbase. The state alleges that sports event contracts offered through these platforms amount to unlicensed sports betting. Griesbach found that the CFTC had not shown it was likely to succeed on the merits, face irreparable harm, or benefit from the balance of equities required for a preliminary injunction.
State Gambling Laws May Cover Sports Contracts
Griesbach also rejected the CFTC’s argument that the Commodity Exchange Act prevents Wisconsin from applying its gambling statutes to CFTC-regulated platforms. “Wisconsin’s gambling statutes do not conflict with federal commodities regulations and are not preempted by them,” the judge wrote.
The CFTC argued that sports event contracts qualify as swaps under the Commodity Exchange Act and fall under its exclusive federal authority. However, Griesbach concluded that the agency had not shown that sports contracts meet the law’s definition of swaps. That finding alone was enough to deny the injunction.
State Attorney General’s Position
Wisconsin Attorney General Josh Kaul has described these contracts as sports bets presented as financial products. “Thinly disguising unlawful conduct doesn’t make it lawful,” Kaul said in April. “These companies’ alleged facilitation of sports betting in Wisconsin should be shut down.” Legal analyst Daniel Wallach said the five state cases are likely to return to Wisconsin courts because the federal statute does not completely preempt state law. State judges could then consider injunctions preventing the platforms from offering sports contracts in Wisconsin.
CFTC Faces Pressure from 44 States
The ruling adds to a wider challenge to the CFTC’s attempt to establish national control over prediction markets. Attorneys general from 44 states have urged the regulator to withdraw its proposal to amend Rule 40.11. Their letter, led by Ohio Attorney General Andy Wilson, argues that the framework exceeds the CFTC’s authority under the Commodity Exchange Act and intrudes into gambling oversight traditionally handled by states. “States have long regulated gambling—including sports bets. The federal government has not,” the letter stated.
The dispute matters for US users because platform access may increasingly depend on where they live. If state laws apply alongside federal commodities rules, Kalshi, Polymarket, and similar operators could face different licensing requirements or restrictions across the country.
Conflicting Rulings Leave Prediction Markets Uncertain
Wisconsin’s decision contrasts with a ruling issued in Minnesota earlier this week. U.S. District Judge Katherine Menendez temporarily blocked Minnesota’s new prediction market ban after finding that the CFTC, Kalshi, and Polymarket were likely to succeed in their federal preemption challenge. The injunction allows the platforms to continue operating in Minnesota while the case proceeds.
The different outcomes leave the industry without a consistent national standard. Courts in Wisconsin and New York have favored state authority, while Minnesota’s ruling supports the CFTC’s claim that some event contracts fall under exclusive federal oversight. A CFTC spokesperson said the agency was disappointed with the Wisconsin decision and would appeal. The next stage could determine whether Wisconsin’s lawsuits proceed in state court and whether the affected platforms must stop offering sports contracts there.
