Illinois lawmaker moves to repeal new prediction market tax
An Illinois lawmaker has introduced legislation to repeal the state's tax on prediction market transactions. The bill would eliminate the levy that Gov. JB Pritzker approved months earlier on trades at regulated event-contract platforms operating in the state. The proposal comes as prediction market operators expand lobbying to reduce friction for retail traders and marks a swift reversal attempt on a tax specifically targeting the sector.
The repeal bid puts Illinois on a third front in the state-by-state cost war hitting prediction market operators. Kalshi, Polymarket, and Robinhood already face Nevada geofences, Connecticut and Baltimore suits, and Missouri's sportsbook tax push from Missouri AG Hanaway; a second state-level tax fight would force platforms to model Illinois alongside Missouri when pricing retail contracts.
The levy hits at the margin where platforms compete on fees, so its survival or death shapes which states traders find cheapest. Gov. Pritzker's prior approval means the repeal effort must overcome an executive who signed the tax once already, stretching the timeline into next session and burning lobbying capital that could have gone to federal preemption fights. For traders, the tax adds a spread-like cost that disappears only if the bill clears both chambers and gets a new signature.
Illinois to a growing pattern of state-level fiscal pressure on prediction markets, alongside Missouri's sportsbook tax claim and the Nevada geofence enforcement that the Ninth Circuit just upheld, deepening the patchwork where CFTC registration no longer guarantees uniform treatment.