A wild week of prediction market-related legal decisions continues.
In a decision released Wednesday, a judge for the U.S. District Court for the Eastern District of Wisconsin denied the Commodity Futures Trading Commission’s (CFTC) request for a preliminary injunction that would have blocked the state from enforcing its gambling laws against the exchanges.
- A federal judge in Wisconsin denied the CFTC's request to block the state from enforcing local gambling laws against prediction market operators.
- The ruling said Wisconsin's gambling laws are not preempted by federal commodities regulations, a setback for the CFTC in its efforts to assert exclusive oversight of sports event contracts in multiple states.
- The decision adds to a busy week of mixed court rulings for prediction markets, including key decisions in Minnesota and New York.
Judge William Griesbach wrote that the CFTC failed to show it would be likely to prevail on the merits of its argument, that it would suffer “irreparable harm,” or that the “balance of equities” would favor its motion.
The judge found that the CFTC had not shown itself likely to succeed on its argument that sports-related event contracts offered by prediction markets qualify as swaps, “a type of financial derivative regulated exclusively by federal commodities law.”
This alone, Griesbach said, would be enough to deny the preliminary injunction.
BREAKING: CFTC loses BIG in Wisconsin, as federal court denies its motion for preliminary injunction and holds that sports-event contracts are not "swaps," and, that even if they satisfied definition, CFTC is unlikely to prevail on its argument that the CEA preempts state law. pic.twitter.com/a9vf8HfKIc
— Daniel Wallach (@WALLACHLEGAL) July 29, 2026
However, the judge addressed another argument at the heart of the growing body of litigation involving prediction markets and their sports-related event contracts. That is, whether federal regulation and law preempt that of states like Wisconsin.
Here, Griesbach again sided against the CFTC. Among other things, the judge wrote that “Wisconsin’s gambling statutes do not conflict with federal commodities regulations and are not preempted by them.”
The loss in Wisconsin could lead to further pushback down the road for prediction markets trying to operate in the state. Wisconsin is currently on a path toward launching statewide online sports betting, but it does not yet have it in place.
Wednesday's decision will also be appealed by the CFTC, a spokesperson for which told Covers that they were "disappointed to see the court’s ruling."
"The CFTC will appeal this decision and continue to vigorously defend our jurisdiction over these markets," they added.
Lawsuit-a-palooza
Wisconsin is one of nine states the CFTC has sued as it tries to preserve its authority over prediction markets. It is also doing so in response to various enforcement efforts by the states, which largely view the trading of sports event contracts as just sports betting by another name.
The Wisconsin Department of Justice announced in April that it was suing five prediction market operators to stop their “alleged facilitation of illegal sports betting” in the state.
“Thinly disguising unlawful conduct doesn’t make it lawful,” Wisconsin Attorney General Josh Kaul said in a statement. “These companies’ alleged facilitation of sports betting in Wisconsin should be shut down.”
Those lawsuits make up just part of all the prediction market-related litigation going on right now in the U.S. There's even another entirely separate prediction market case involving Wisconsin's Ho-Chunk Nation, a federally recognized tribe that operates casinos in the state.
However, the CFTC did prevail in a somewhat similar case earlier this week in Minnesota, where another federal judge blocked a recently passed state law that would restrict prediction markets from coming into force.
These are all just some of the many lawsuits involving prediction markets. Kalshi, a prediction market operator, took another loss in New York this week, which leaves it facing the possibility of restricting its operations there, as it has been forced to do in Nevada and Michigan.
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Lemon, it's Wednesday
In other words, it’s been another busy week of litigation and legal decisions for prediction market operators, regulators, and opponents (and it's only Wednesday).
That has basically become the norm these days, as the sports-related event contracts offered for trading by the exchanges are being hotly contested by state-level gambling regulators.
Meanwhile, the CFTC recently proposed new rules for prediction markets and their sports event contracts that would largely allow that business to continue.
The federal agency is also fighting to protect its jurisdiction in court, including the lawsuit it filed against Wisconsin in April that the agency said was in response to the state's lawsuits against five other prediction market operators, including Kalshi.
“States cannot circumvent the clear directive of Congress,” CFTC chairman Michael Selig said in a press release. “Our message to Wisconsin is the same as to New York, Arizona, and others: If you interfere with the operation of federal law in regulating financial markets, we will sue you.”
