A Wisconsin federal judge has rejected the Commodity Futures Trading Commission’s attempt to stop the state from enforcing gambling laws against prediction-market operators offering sports-related contracts, dealing another setback to the agency’s effort to establish federal control of the sector.
US District Judge William Griesbach issued the decision on July 29, 2026, denying the CFTC’s request for a preliminary injunction. The agency argued that federally regulated prediction markets should remain outside state gambling enforcement.
The court found that the CFTC had not demonstrated a sufficient likelihood of success or shown the harm required for emergency relief. Griesbach also determined that Wisconsin’s gambling rules could apply to sports event contracts.
Federal and State Authority Collide
A central issue was whether federal commodities law prevents Wisconsin from applying its gambling statutes. Griesbach rejected that position, writing that “Wisconsin’s gambling statutes do not conflict with federal commodities regulations and are not preempted by them.”
The ruling also addressed the CFTC’s claim that sports event contracts qualify as swaps, placing them under federal commodities regulation. The judge concluded that the agency had failed to show it was likely to prevail on that argument.
The decision follows lawsuits Wisconsin filed in April against Kalshi, Polymarket, Crypto.com, Robinhood and Coinbase. State authorities accused the companies of facilitating sports betting without required licenses.
Wisconsin Attorney General Josh Kaul said, “Thinly disguising unlawful conduct doesn’t make it lawful.” He added, “These companies’ alleged facilitation of sports betting in Wisconsin should be shut down.”
The CFTC responded with its own lawsuit against Wisconsin, arguing that states cannot interfere with federally regulated derivatives markets. The agency is pursuing similar cases in eight other states as officials challenge sports event contracts.
Mixed Rulings Add to Legal Uncertainty
The Wisconsin decision came during an active period for prediction-market litigation. The CFTC secured a favorable ruling in Minnesota earlier in the week, when a federal judge blocked a state law that would have restricted prediction markets.
Kalshi has faced setbacks elsewhere. A ruling in New York this week left the company facing possible restrictions, following limits already imposed in Nevada and Michigan. Wisconsin also has a separate dispute involving the Ho-Chunk Nation, a federally recognized tribe that operates casinos in the state.
The latest ruling could have further consequences because Wisconsin is moving toward statewide online sports betting, although it has not yet launched.
The CFTC said it plans to appeal. A spokesperson described the agency as “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.
CFTC Chairman Michael Selig said, “States cannot circumvent the clear directive of Congress,” adding, “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.”
The dispute could now move to the 7th Circuit, giving the CFTC and Kalshi another opportunity to challenge Wisconsin’s position. The competing rulings leave the legal status of sports prediction contracts unsettled as federal and state authorities continue to contest regulatory control.
Source:
“CFTC Suffers Setback in Wisconsin in Legal Fight Over Sports Prediction Markets”, finance.yahoo.com. July 29, 2026
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