Illinois enacts new taxes and rules on prediction markets; Kalshi sues
Illinois enacted amendments to the Sports Wagering Act imposing new taxes on sports-related event contracts on prediction markets and requiring state licensing. The law classifies such wagers as sports betting subject to state rules. Kalshi filed suit challenging the measures as preempted by CFTC oversight. The changes took effect July 1.
Illinois imposes direct state taxes and licensing on event-contract platforms, unlike North Carolina's 6% tax that explicitly defers to CFTC authority with no added regulatory obligations.
The approach challenges the preemption strategy Kalshi and Polymarket rely on against state gambling laws. Kalshi's suit tests whether CFTC registration blocks state sports-betting treatment; if states prevail, similar rules and compliance costs could spread.