Illinois passes 1.75% tax on prediction market sports contracts amid legal fights
Illinois lawmakers passed new gaming levies targeting prediction markets and daily fantasy sports operators on Wednesday, June 3. The legislation imposes a 1.75% tax on prediction market sports contracts, mirroring the state's existing sportsbook tax structure. The tax marks one of the first state-level measures specifically directed at prediction market products rather than traditional gaming operators. The approval comes while Illinois remains locked in legal disputes over federally regulated prediction markets. Colorado was also mentioned among states with relevant activity, though details were not provided.
Any state law adopting Illinois's tax-and-licensure framework would force Kalshi and Polymarket to remit gaming taxes retroactively or face geofencing orders. The fiscal template arms legislators in Nevada, Minnesota, and Rhode Island with precedent for their own pending enforcement actions.