Kalshi Sues Illinois Over New State Tax on Sports-Related Prediction Markets
Kalshi sued Illinois in federal court, arguing the state cannot tax prediction markets or treat sports-related event contracts as gambling revenue. Illinois recently passed a law creating a Sports Wagering Fund that would tax gross receipts from sports-related prediction market wagers at 15%, starting July 1. Kalshi says its contracts are regulated federally by the CFTC, not by the state, and warns it could face criminal penalties in Illinois unless it stops offering the products or pays the tax. The lawsuit aligns with a parallel challenge by the Trump-era CFTC, which has also sought to block the Illinois law. The dispute is part of a broader nationwide fight over whether prediction markets are federally regulated financial products or state-regulated gambling, a question likely headed to the Supreme Court.
