A federal judge in Michigan has ruled that sports-related prediction market contracts offered by Polymarket do not fall within the Commodity Futures Trading Commission’s regulatory authority.
Judge Paul L. Maloney of the US District Court for the Western District of Michigan denied Polymarket’s request for a preliminary injunction that aimed to prevent Michigan regulators from blocking the operator’s sports event contracts.
Maloney rejected the company’s argument that its sports contracts should be treated as swaps, saying on Wednesday, “Plaintiff’s vision 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.
