US Federal Court Dismisses CFTC Injunction Application, Wisconsin Gambling Law Enforcement Authority Over Prediction Markets Upheld
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US Federal Court Dismisses CFTC Injunction Application, Wisconsin Gambling Law Enforcement Authority Over Prediction Markets Upheld
According to a ruling by the U.S. District Court for the Eastern District of Wisconsin on July 28, the court denied the CFTC's motion for a preliminary injunction seeking to prohibit Wisconsin from enforcing against sports-related event contracts on platforms such as Kalshi, Coinbase, Robinhood, Polymarket, and Crypto.com. The court held that the CFTC failed to demonstrate a likelihood of success on the merits regarding its claim—that the definition of "swap" under the Commodity Exchange Act (CEA) encompasses sports event contracts—and that gambling regulation falls within the scope of the state's traditional police powers, and federal law did not clearly express an intent to preempt state law. In addition, the court simultaneously denied the motion to intervene by Kalshi and Crypto.com Derivatives North America (CDNA), as well as the motion to intervene as a defendant by the American Gaming Association (AGA). Currently, the substantive litigation between the CFTC and Wisconsin will continue to proceed.
Navigating Web3 tides with focused insightsTechFlow reports, July 30, according to a ruling by the U.S. District Court for the Eastern District of Wisconsin on July 28, the court rejected the CFTC's motion for a preliminary injunction seeking to prohibit Wisconsin from enforcing against sports-related event contracts on platforms such as Kalshi, Coinbase, Robinhood, Polymarket, and Crypto.com. The court held that the CFTC failed to demonstrate a likelihood of success on the merits regarding its claim—that the definition of "swaps" under the Commodity Exchange Act (CEA) covers sports event contracts—and that gambling regulation falls within the scope of the state's traditional police powers, as federal law did not clearly express an intent to preempt state law. Additionally, the court also rejected the motions to intervene by Kalshi and Crypto.com Derivatives North America (CDNA), as well as the motion to intervene as a defendant by the American Gaming Association (AGA). Currently, the substantive litigation between the CFTC and Wisconsin will continue to proceed.
