Kalshi Sues Illinois, Says Prediction-Market Oversight Falls Under Federal Law

Kalshi, a US prediction-market platform, has sued to block Illinois's new law regulating prediction markets.

The Block reported on June 24 that Kalshi recently filed suit in the US District Court for the Northern District of Illinois against Governor JB Pritzker, Attorney General Kwame Raoul and other state officials. The company is seeking temporary and permanent injunctions against the state's prediction-market law.

The case centers on jurisdiction. Illinois recently used budget and revenue bill SB3019 to require prediction-market platforms to obtain a state license. The bill also imposes a 0.2% tax on digital-asset transactions and service amounts involving Illinois users.

Kalshi argues the rules conflict with federal law. It says its prediction-market contracts are subject to federal oversight by the Commodity Futures Trading Commission and cannot be separately regulated by the state.

The CFTC also maintains that prediction markets fall under federal jurisdiction. The agency has already sued nine states, including Illinois, seeking confirmation of that authority.

In its complaint, Kalshi said halting sports prediction-market contracts to comply with Illinois law would violate the CFTC's uniformity requirements. Restricting access from Illinois would also require complex and costly technical measures, it said, causing commercial harm.