GRAND RAPIDS, June 26 -- Polymarket entered a federal courthouse on June 17 with one task: convince a judge that the sports contracts it sells are financial derivatives, not sports bets. The judge was not convinced.

U.S. District Judge Paul L. Maloney of the Western District of Michigan denied Polymarket's request for a preliminary injunction that would have halted Michigan officials from enforcing state gambling laws against the platform's operations. His decision applied equally to Robinhood, which distributes Polymarket's contracts to retail customers, with Maloney reaching the same conclusion in what amounted to twin rulings issued the same day. Both companies were left operating in Michigan without the legal shield they sought, and ...