Kalshi sues Illinois to block gambling license and 15% tax on prediction markets
Kalshi filed a federal lawsuit against Illinois officials including Governor J.B. Pritzker on June 24, 2026, seeking to block a state law set to take effect July 1 that would impose a 15% tax on gross receipts from sports-related wagers and require prediction market operators to obtain an Illinois gambling license. The company argues that its federally regulated event contracts fall outside state reach and that federal law preempts the new requirements. Kalshi claims it would be irreparably harmed by the legislation, which was signed as part of a budget package. The suit, filed in the U.S. District Court for the Northern District of Illinois, seeks temporary and permanent injunctive relief before the regulatory regime begins.
Any ruling affirming federal preemption would nullify Illinois's licensing and tax regime, eliminating a 15% cost burden Kalshi faces no other CFTC-registered platform pays. A loss invites copycat statutes from states watching the Midwest.
Fits a pattern of federal preemption fights across Minnesota, Rhode Island, New Mexico, and Kentucky, with the CFTC now suing multiple states to block state-level prediction market restrictions while Kalshi separately challenges Illinois's tax-and-license regime.