Federal Judge Paul Maloney struck down Polymarket’s request for a preliminary injunction, noting the prediction market operator was unlikely to succeed in its case against Michigan.
Key Takeaways
- Polymarket filed a lawsuit in March, seeking to block Michigan from enforcing its gambling laws concerning the prediction market operator’s sports contracts.
- District Court Judge Paul Maloney denied Polymarket’s request on Wednesday.
- Judge Maloney also rejected Robinhood’s request for a preliminary injunction Wednesday on the same grounds.
On Wednesday, U.S. District Judge Paul Maloney denied Polymarket’s request for a preliminary injunction that would have let the prediction market operator skirt Michigan’s state gambling laws. Polymarket had filed its request in March.
Prediction markets claim they are above state laws since they are regulated by the federal government.
They claim their products qualify as financial swaps and fall under federal statutes. Many states, however, claim their products are a form of gambling, and therefore must conform to state gambling laws. Prediction markets’ sporting event contracts are at the epicenter of the debate.
Last year, prediction markets started offering sporting event contracts that mimic sports betting in almost every way, including the ability to wager on prop bets and parlays. Many states see this as a form of illegal gambling.
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Robinhood also denied
Judge Maloney’s decision struck down Polymarket’s claim at its heart. In his legal opinion, sporting event contracts aren’t financial derivatives or swaps.
Maloney stated, “Plaintiff’s version of the scope of derivatives is so vast that it would encompass vast swaths of activity never understood to be associated with the financial industry and instead traditionally associated with core state, as opposed to federal, responsibilities.”
Michigan federal judge: "There is no clear statement that Congress intended to supersede the states’ traditional role in regulating gambling."
— Daniel Wallach (@WALLACHLEGAL) June 17, 2026
Result: The CEA does not preempt Michigan's sports gambling laws and Polymarket's motion for preliminary injunction is denied. pic.twitter.com/D2t9ln0f34
In his decision, Judge Maloney also stated, “there is no clear statement that Congress intended to supersede the states’ traditional role in regulating gambling.”
He added, “Plaintiff thus 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.”
Later that same day, Judge Maloney came to the same decision in the nearly identical case. Robinhood’s request for a preliminary injunction was also denied.
Robinhood's motion for preliminary injunction was also denied by Michigan federal judge Paul Maloney, who earlier today denied Polymarket's PI motion. The two opinions are virtually identical. The same judge will also be deciding Michigan's motion to remand vs. Kalshi. pic.twitter.com/BqKqVAEbLj
— Daniel Wallach (@WALLACHLEGAL) June 18, 2026
Neither of these two decisions, however, will be the final say in the battle between states and prediction markets. That won’t likely come unless the issue goes up before the U.S. Supreme Court.
