A Federal Court has denied the Commodity Futures Trading Commission (CFTC)’s preliminary injunction request against the State of Wisconsin, deeming the CFTC would be “unlikely to prevail” in its argument that the Commodity Exchange Act preempts state law.
The ruling confirmed sports-event contracts cannot be deemed as “swaps” under the Commodity Exchange Act, while Wisconsin’s Department of Justice originally filed enforcement action against Kalshi, Robinhood, Coinbase, Polymarket, Crypto.com and affiliated entities on April 24.
The complaints, filed in Dane County, allege that the companies are facilitating illegal sports betting by presenting sports wagering activity as event contracts. Wisconsin law prohibits most commercial gambling, with sports betting permitted only in limited circumstances.
The CFTC responded with a federal lawsuit in the Eastern District of Wisconsin on April 27, seeking declaratory and injunctive relief against multiple regulators within the state.
Despite the most recent loss in Wisconsin, a federal judge in Minnesota recently approved the CFTC’s request to block the state’s ban on prediction markets, which was set to go into effect on August 1.
The judge issued a temporary restraining order disallowing lawmakers from enforcing the legislation "until a final decision on the merits is reached in these cases.”
Governor Tim Walz signed a bill to prohibit prediction markets after the legislation was approved by the Minnesota government in May, resulting in lawsuits being filed by the CFTC, Kalshi and Polymarket.
It remains to be seen whether the CFTC can utilize the Minnesota victory to propel cases in fellow US jurisdictions toward its favor, having also successfully intervened in Kalshi’s case with Arizona regulators earlier in 2026.
The CFTC opened an investigation into teleprompter operator Gabriel Perez on July 16, who is accused of profiting off trades related to speeches conducted by President Donald Trump
