Woofun AI reports that a federal judge in Michigan has determined that transactions within sports-related prediction markets do not qualify as swaps under the Commodity Futures Trading Commission's regulatory framework. Consequently, these activities fall outside the CFTC's jurisdiction. The court denied Polymarket's request for an injunction against state regulators, citing a low probability of success on the merits. The ruling characterized the platform's sports prediction contracts as akin to illegal sports betting rather than legitimate federal derivative products. This legal battle is expected to advance to the Sixth Circuit Court of Appeals, with potential escalation to the U.S. Supreme Court.