- Judge William Griesbach rejected the CFTC’s bid to keep Wisconsin’s gambling laws off five prediction market platforms.
- The court found the agency unlikely to prove sports event contracts qualify as swaps under the Commodity Exchange Act.
- The ruling came two days after a Minnesota federal judge reached the opposite conclusion and blocked that state’s ban.
- Wisconsin’s April state-court lawsuits against Kalshi, Polymarket, Crypto.com, Robinhood and Coinbase can now proceed.
MILWAUKEE – A federal judge on Wednesday refused the Commodity Futures Trading Commission’s bid to shield the prediction market platforms Kalshi, Polymarket, Crypto.com, Robinhood and Coinbase from Wisconsin’s gambling laws. The court ruled the agency had not shown that the sports event contracts the platforms offer are swaps under the Commodity Exchange Act.
What The Ruling Says
U.S. District Judge William C. Griesbach of the Eastern District of Wisconsin denied the preliminary injunction Wednesday in United States v. State of Wisconsin, the case the CFTC and the Justice Department filed April 28 to assert the commission’s exclusive jurisdiction over federally registered prediction markets.
The court held the CFTC was unlikely to show that sports event contracts fall within the Commodity Exchange Act’s definition of a swap. Even if they did, the court found, the agency would be unlikely to prevail on its argument that federal law preempts Wisconsin’s gambling statutes.
Of contracts registered with the commission, the decision said “the plain language of Wisconsin’s commercial gambling statute seems to cover sports-related event contracts.” Griesbach also found the CFTC had not demonstrated irreparable harm, and he denied motions by Kalshi and Crypto.com to intervene in the case.
Opposite Outcomes Two Days Apart
The denial landed two days after a federal judge in Minnesota blocked that state’s prediction-market prohibition five days before its Aug. 1 effective date, finding the platforms and the CFTC likely to prevail on federal-preemption grounds. The two rulings leave federal district courts split on whether CFTC registration shields sports event contracts from state gambling enforcement, a question that reaches every state where the platforms operate.
The dispute extends beyond sports. The same exchanges quote election odds on control of Congress in the midterms and on the 2028 presidential race, and Wisconsin carries its own Wisconsin election odds markets for 2026. The platforms last drew this kind of scrutiny in May, with Polymarket and Kalshi’s first insider-trading reckoning.
Wisconsin’s Felony Claims Proceed
Wisconsin Attorney General Josh Kaul sued the five platforms in state court April 23, alleging their sports event contracts amount to unlawful commercial gambling and citing the felony provisions of Wis. Stat. § 945.03(1m). “Thinly disguising unlawful conduct doesn’t make it lawful,” Kaul said in announcing the lawsuits. The complaints allege the companies collect a fee on every bet, generating revenue from Wisconsin residents in violation of state law.
With the injunction denied, Wisconsin’s three Dane County lawsuits against the five companies can move forward while the federal litigation continues. Any appeal of Wednesday’s ruling would go to the 7th U.S. Circuit Court of Appeals.
