Kalshi challenges Illinois oversight of sports prediction markets
The federal-state showdown over who actually gets to regulate prediction markets is heating up fast, with billions of dollars and the industry's future on the line.
Kalshi has sued Illinois Governor JB Pritzker, Attorney General Kwame Raoul, and other state officials over a newly enacted law that introduces licensing requirements for prediction market platforms and a 0.2% charge on certain digital asset-related transactions.
The company argues that the law conflicts with federal regulations because Kalshi’s event contracts are overseen by the Commodity Futures Trading Commission.
According to the complaint, complying with Illinois requirements could force the company to restrict access to its services in the state, impose high operational costs, and place it at odds with federal regulatory obligations.
The case comes amid ongoing conflict between state governments and federal regulators over who has authority to oversee prediction markets. While the CFTC has repeatedly argued that it holds exclusive jurisdiction, several states contend that prediction market operators may be violating local gambling laws.
Kalshi is seeking a temporary restraining order, preliminary injunction, and permanent injunction to prevent Illinois from enforcing the law when it takes effect on July 1.