Federal judge rejects emergency injunction bid from prediction market Polymarket in Michigan
A federal judge in Michigan has declined to step in immediately to shield prediction market Polymarket from possible enforcement by state regulators, leaving the company exposed as a wider legal fight over sports event contracts continues.
In an opinion issued Tuesday (March 10), U.S. District Judge Paul L. Maloney rejected a request from QCX LLC, which operates as Polymarket, for a temporary restraining order or emergency injunction that would have prevented potential action by Michigan officials, including Attorney General Dana Nessel. The company wanted emergency protection while it challenges the state’s ability to regulate certain prediction contracts tied to sports.
“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 judge wrote.
Polymarket runs an online marketplace that lets users enter contracts based on whether particular events happen. The platform enables the deals and then takes a fee. According to the court, “Plaintiff operates a prediction contract market, wherein parties may form contracts with each other stipulating that one party will pay the other if a specified thing happens (or fails to) in a specified way.”
However, the opinion explains that “the prediction contracts include contracts involving sporting events, including individual happenings within sporting events, such as the scores of games.”
Polymarket faces growing clash over sports event contracts amid Michigan injunction bid
The dispute arrives as Michigan regulators ramp up scrutiny of event-based prediction markets that resemble sports betting. The state recently filed a lawsuit against another operator, Kalshi, arguing that contracts tied to sports outcomes amount to unlicensed sports wagering under Michigan law.
Attorney General Nessel’s office alleges that offering contracts tied to game results or in-game events effectively mirrors traditional sports betting, which in Michigan must be licensed and regulated by the state.
Concerned it could be next, Polymarket went to federal court seeking emergency protection. The company argued that Michigan’s recent action against Kalshi signaled regulators might soon move against similar platforms.
“Fearing that enforcement action against it is imminent, Plaintiff filed the present motion for a TRO and for a preliminary injunction,” the court wrote.
Polymarket’s legal argument rests on federal commodities law. The company says the event contracts offered through its marketplace qualify as “swaps” under federal derivatives rules. If that interpretation holds, federal oversight could preempt state gambling laws and block Michigan from treating the contracts as sports betting.
Judge Maloney said Polymarket had not yet demonstrated that its legal theory is likely to succeed. The opinion notes that the company did not adequately show why sports-related prediction contracts fall within the statutory definition of swaps.
The judge also pointed out that Polymarket offered little evidence Michigan would “have threatened enforcement actions against them specifically in the coming days.”
Because temporary restraining orders are meant for urgent situations, the court said the risk described by Polymarket remained speculative.
The case now moves forward through normal briefing on Polymarket’s request for a preliminary injunction.
Featured image: Polymarket / Canva
The post Federal judge rejects emergency injunction bid from prediction market Polymarket in Michigan appeared first on ReadWrite.