PANews, June 18 – According to Decrypt, U.S. District Judge Paul L. Maloney in Michigan ruled that sports prediction markets do not qualify as SWAP contracts regulated by the CFTC, denying Polymarket’s request for a preliminary injunction to block the state from restricting its sports event contracts. The judge made clear that Polymarket is unlikely to prevail in this case and stated that sports-related betting does not constitute a swap and should not be regulated by the CFTC.

The CFTC, with backing from the Trump administration, has argued that it has authority under the Dodd-Frank Act to regulate prediction markets and has sued multiple states seeking to restrict them. Judge Maloney’s ruling held that Polymarket’s interpretation of the scope of derivatives was overly broad and would sweep in a large number of activities that have traditionally fallen under state, not federal, responsibility. The Sixth Circuit Court of Appeals will begin hearing the case next month, and it may ultimately be decided by the Supreme Court.