What to know:
- CFTC Loss: A federal judge denied the CFTC’s request to block Wisconsin from enforcing its gambling laws against sports prediction markets.
- The court ruled that CFTC registration does not shield platforms like Kalshi from complying with state gambling regulations.
- Wisconsin can continue its lawsuit against Kalshi, Polymarket, Crypto.com, Robinhood, and Coinbase over unlicensed sports event contracts.
CFTC loss is the latest hurdle for those fighting against gambling laws in the court case over sports prediction markets after a federal court in Wisconsin declined to halt the state’s gambling laws. CFTC loss undermines the argument of the CFTC that it can regulate the prediction market on its own without state-level action.
CFTC Loss After Judge Rejects Emergency Request
On July 29, 2026, United States District Court Judge William Griesbach refused the U.S. Commodity Futures Trading Commission’s (CFTC) motion for a preliminary injunction against Wisconsin concerning enforcement of state gambling laws against prediction markets that provide sports event contracts.
CFTC loss followed an attempt by the Commission to claim jurisdiction over the matter because federal regulation of the prediction market makes it within the exclusive competence of the Commission. However, the judge decided that mere registration with the CFTC cannot exempt prediction companies from state gambling laws during the litigation period.
Kalshi and Crypto.com joined the list of companies that could not become part of the lawsuit.
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Court Refuses to Block Wisconsin Laws
The case considers whether there is a conflict between Wisconsin’s gambling laws and federal laws. According to Judge Griesbach, the Commodity Exchange Act does not explicitly prohibit Wisconsin from enforcing its gambling laws.
The court noted that Wisconsin’s gambling laws may apply to sports-related event contracts. Even though the prediction platforms claim these contracts are financial products, the state officials believe that they are sports bets, therefore subject to state gaming regulation.
Judge Griesbach further ruled that CFTC had not demonstrated irreparable harm that would happen immediately or permanently if Wisconsin enforces its gambling laws.
Wisconsin Lawsuits Target Five Prediction Platforms
This decision comes after the state had filed a case against Kalshi, Polymarket, Crypto.com, Robinhood, and Coinbase back in April, citing that the companies provided contracts concerning sports activities but did not have the necessary gambling licenses under the laws of Wisconsin.
As a result of this action, the CFTC filed its own case stating that the states do not have any right to intervene in federal derivative markets. But now, due to the recent CFTC loss, Wisconsin can pursue its lawsuit.
Appeal Expected as Legal Battle Continues
The latest ruling by Wisconsin is part of an emerging legal issue regarding the regulation of prediction markets in the US. Earlier, the U.S. Court of Appeals for the Third Circuit ruled in favor of Kalshi that federal regulation can be more stringent than state regulations.
Both cases will now be heard in state court. Daniel Wallach, an attorney, stated that state courts could rule in favor of a preliminary injunction that stops the prediction sites from offering their sports events contracts in Wisconsin.
In addition, Kalshi and the CFTC will likely take their case to the U.S. Court of Appeals for the Seventh Circuit. This could prove crucial to determine who will have the ultimate jurisdiction over the growing prediction market industry.
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