Judge denies Polymarket’s preliminary injunction request against Michigan Attorney General

Michigan District Court Judge Paul Maloney has denied Polymarket’s motion for a temporary injunction against Attorney General Dana Nessel, ruling the operator’s prediction market products fail to fall under the statutory definition of “swaps.”

"In the Court’s judgment, the statutory definition of 'swap' is ambiguous, and the context of the statute and the presumption against intruding into traditional areas of state authority lead to the conclusion that Plaintiff’s products are not included in it,” Maloney wrote. 

"Context and purpose make clear that Congress intended the definition of swap to capture a set of products in the financial industry which caused the 2008 financial crisis and threatened to create other crises in the future, and not to place broad swaths of everyday economic activity under the authority of the Commodity Futures Trading Commission (CFTC)."

Maloney also denied Polymarket’s motion for a temporary restraining order against Attorney General Nessel in March, ruling the Commodity Exchange Act does not preempt state gambling laws in Michigan. 

The Western District of Michigan Court Judge believes Polymarket “has not met its burden to show a likelihood of success on the merits, and the cloudy legal forecast weakens its showings on the other factors.”

Following his denial of Polymarket’s temporary restraining order, Maloney helped Michigan join Nevada and Ohio in determining sporting event contracts are not “swaps” regulated by the CFTC.

Polymarket’s recent losses in court extend to the Silver State as well, following Judge Jason Woodbury's decision to grant the Nevada Gaming Control Board (NGCB)’s preliminary injunction request against the operator on June 1. 

While a written order is “forthcoming” from Woodbury, the District Court Judge had previously issued a temporary restraining order against Polymarket on January 29, claiming an “unlicensed participant such as Polymarket obstructs the Board’s ability to fulfill its statutory functions.”

In Minnesota, Polymarket filed a lawsuit against Governor Tim Walz and Attorney General Keith Ellison on June 4 to challenge the state’s ban on prediction markets related to sports, games of skill, war and terrorism, entertainment and politics.