A class action lawsuit filed in Massachusetts has accused DraftKings of offering illegal sports betting by disguising its prediction market products as event contracts.
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On July 29, 2026, a federal judge denied the Commodity Futures Trading Commission’s (CFTC) request for a preliminary injunction to block Wisconsin from implementing state gambling laws and banning prediction markets.
U.S. District Judge William Griesbach made the ruling, explaining that the commission failed to show how it would suffer irreparable harm or that it could succeed on the merits of the argument. With the procedural win for Wisconsin, the state will be allowed to enforce action against prediction markets.
The court stated:
“The definition of the term ‘swap’ becomes so broad that it sweeps in any agreement or transaction dependent on anything happening that could conceivably result in any degree of financial consequence for anyone. The CFTC has not shown that it is likely to prevail on its argument that the CEA’s definition of ‘swaps’ covers the event contracts offered by entities such as Kalshi.”
The court additionally stressed that the CFTC couldn’t prove that Wisconsin’s state gambling laws don’t cover sports event contracts.
Judge Griesbach commented:
“The plain language of Wisconsin’s commercial gambling statute seems to cover sports-related event contracts registered with the CFTC. The power of the state to enact laws to suppress gambling cannot be doubted.”
According to the commission, prediction market products should be regulated under the Commodity Exchange Act (CEA); however, the court found that the CFTC didn’t meet legal requirements to receive an injunction.
