Kalshi sues Illinois to block July 1 taxes and gambling license rules
Prediction market Kalshi sued Illinois on Tuesday to block new taxes and license requirements set to take effect July 1. The lawsuit, first reported by Capitol News Illinois and CBS News, challenges Senate Bill 3019, which amended the state's Sports Wagering Act to impose a 1.75 percent tax on the first 5 million sports wagers per fiscal year (and 3.5 percent thereafter) and bring Kalshi's sports-related event contracts under state gambling oversight. Kalshi operates as a CFTC-regulated platform where users trade on outcomes ranging from World Cup top goalscorers to reality show winners. The suit frames the state rules as clashing with Kalshi's federally regulated event-contract model by adding costs and licensing burdens.
Illinois's 1.75 percent tax and license rules would take effect in days. Kalshi could face a state gambling requirement that overrides its CFTC registration, and a loss invites other states to replicate the Illinois dual-track model.