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A federal judge denied predictions market operator Polymarket’s request for an emergency order blocking potential enforcement of Michigan gambling laws.
U.S. District Judge Paul L. Maloney ruled that Polymarket failed to meet the high standard required for a temporary restraining order:
“The Court is not persuaded that the likelihood of success on the merits is great enough to warrant a TRO.
“Nor is it persuaded that there is sufficient evidence that irreparable injury will result before Defendants can be heard.”
The ruling means Michigan regulators — including Attorney General Dana Nessel and the Michigan Gaming Control Board — remain free to pursue enforcement while the lawsuit proceeds.
Case centers on prediction market legality
Polymarket operates an online platform where users trade event contracts tied to real-world outcomes, including sports results, which has been argued is Michigan sports betting.
In the ruling, the court described the marketplace as one where “parties may form contracts with each other stipulating that one party will pay the other if a specified thing happens.”
Those contracts can include sports-related outcomes. The judge wrote:
“The prediction contracts include contracts involving sporting events, including individual happenings within sporting events.”
Michigan regulators argue those contracts function similarly to sports wagering. In Michigan, licensed operators regulated by the MGCB can offer sports wagering markets.
Polymarket sought emergency protection
Polymarket filed the lawsuit after Nessel sued rival prediction market operator Kalshi in state court over sports event contracts.
The company argued that action put it at risk of similar enforcement.
“Fearing that enforcement action against it is imminent, Plaintiff filed the present motion for a TRO,” the court wrote.
Polymarket has argued its event contracts are financial derivatives regulated by the Commodity Futures Trading Commission. It argues that federal law should preempt state gambling statutes.
Michigan can still pursue enforcement
Because the court declined to issue emergency relief, Michigan regulators retain the ability to take action against Polymarket if they determine its products violate state gambling laws.
The ruling does not resolve the underlying lawsuit, which will continue in federal court.
Prediction markets battle heats up
The dispute is part of a growing legal battle between prediction market platforms and state gambling regulators across the country. Just last week, Michigan was involved in three separate lawsuits involving prediction markets.
Michigan Attorney General Dana Nessel filed a civil enforcement action against Kalshi in Ingham County Circuit Court.
The complaint argues that Kalshi is operating what amounts to an unlicensed sportsbook by offering contracts tied to the outcomes of sporting events without approval from the MGCB.
Robinhood Derivatives is also involved in litigation against Michigan officials tied to the same dispute over prediction markets.
The central question in many of those cases is whether federal commodities law preempts state gambling regulations when it comes to event contracts.
States such as Michigan argue that contracts tied to sports outcomes resemble unlicensed sports betting, while companies like Polymarket maintain they operate federally regulated financial markets.
The outcome of the case could shape how prediction markets operate across the United States.
