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Checked Oct. 21, 2026

IL ยท Checked Oct. 21, 2026

Prediction market law in Illinois

In litigation

A federal judge partly blocked Illinois from applying its sports-wagering license and criminal laws to Kalshi and Coinbase; fee questions remain open.

The Illinois Gaming Board sent cease-and-desist letters to Kalshi, Crypto.com and Robinhood in April 2025 and to Polymarket in January 2026, and warned licensees about prediction-market ties. Coinbase, the United States with the CFTC, and Kalshi each sued Illinois officials in federal court. On October 2, 2026, Judge Martha M. Pacold partly granted preliminary injunctions, finding the championship-winner contracts at issue likely swaps and Illinois's licensing and related criminal provisions likely preempted. She held over the challenge to the exchange-wager fees Illinois adopted in SB 3019 (1.75% to 3.5% per wager) for more briefing, and the parties were told to file a proposed injunction by October 29.

Timeline of state actions

  1. Court order, Kalshi, Coinbase, Crypto.com

    Judge Pacold granted in part the injunction motions in the Coinbase, CFTC and Kalshi cases, finding Illinois's licensing and related criminal provisions likely preempted as to the contracts at issue; the fee challenge was continued for more briefing.

    Source: N.D. Ill. Memorandum Opinion and Order, No. 1:26-cv-03659, Dkt. 99

  2. Other development, Kalshi

    The Illinois attorney general joined a 37-state amicus brief in the Sixth Circuit (KalshiEX LLC v. Schuler) supporting Ohio's authority to apply its gaming laws to Kalshi.

    Source: California Attorney General (coalition press release)

  3. Legislation

    The legislature passed SB 3019, a budget revenue bill that taxes 'exchange wagers' on prediction markets at 1.75%, rising to 3.5% after five million wagers a year.

    Source: Taft law bulletin

  4. Other development

    The Illinois attorney general was one of 41 attorneys general on a comment letter asking the CFTC to confirm in rulemaking that it lacks jurisdiction over sports-related event contracts.

    Source: Colorado Attorney General (coalition press release)

  5. Other development, Kalshi, Crypto.com, Polymarket US, Robinhood

    The United States and the CFTC sued Illinois in federal court, arguing federal law preempts state enforcement against CFTC-registered exchanges.

    Source: Vultax lawsuit tracker

  6. Cease-and-desist, Polymarket

    The Gaming Board sent Polymarket a cease-and-desist letter.

    Source: Illinois Gaming Board cease-and-desist letters page

  7. Operator lawsuit, Coinbase

    Coinbase sued Illinois officials in federal court (Coinbase Financial Markets v. Raoul) (month only confirmed).

    Source: DeFi Rate

  8. Regulator guidance

    IGB memo to licensees said prediction markets offering sports event contracts are gambling under Illinois law and partnering with them can affect license suitability.

    Source: Illinois Gaming Board memorandum

  9. Cease-and-desist, Kalshi, Crypto.com, Robinhood

    The Illinois Gaming Board sent cease-and-desist letters to Kalshi, Crypto.com and Robinhood over unlicensed sports wagering.

    Source: Illinois Gaming Board cease-and-desist letters page

Resolved questions

  1. Will a federal judge block Illinois from enforcing its gambling laws against prediction markets?

    On Oct. 2, Judge Pacold granted the preliminary-injunction motions in part in the Kalshi, Coinbase and federal cases; fee challenges were held for more briefing. The injunction itself has not been entered; proposed terms are due Oct. 29. N.D. Ill. No. 1:26-cv-03659. Source: Opinion and order (PDF)

    Yes, in part

Laws and bills

  • SB 3019Enacted

    FY2027 revenue package (Sports Wagering Act amendments on exchange wagers)

    Brings prediction-market 'exchange wagers' on sporting events under the Sports Wagering Act and imposes a 1.75%-3.5% per-wager transaction tax.

    Source: taftlaw.com

  • HB 5059Pending

    Oracle Act

    Would create prediction market oversight, bar under-21 participation, and require responsible-gaming measures.

    Source: ncsl.org

  • HB 5142Pending

    Sports Wagering Act amendment (prediction markets)

    Would extend sports wagering rules to prediction market participation on sports events and athlete statistics.

    Source: ncsl.org

  • SB 4168Pending

    Prediction Markets Regulation and Taxation Act

    Would require a master prediction market license from the Gaming Board to offer qualifying contracts to residents.

    Source: ncsl.org

  • HB 5811Pending

    Sports Wagering Act amendment (repeal exchange-wager tax)

    Would repeal the exchange-wager transaction tax enacted in SB 3019.

    Source: ncsl.org

Court cases

  • KalshiEX LLC v. RaoulU.S. District Court for the Northern District of Illinois, 1:26-cv-07363Injunction granted
  • Coinbase Financial Markets, Inc. v. RaoulU.S. District Court for the Northern District of Illinois, 1:25-cv-15406Injunction granted
  • United States v. State of IllinoisU.S. District Court for the Northern District of Illinois, 1:26-cv-03659Injunction granted
  • Illinois Gambling Recovery LLC v. Kalshi Inc., et al.Circuit Court of Cook County, Illinois (reported remanded from the U.S. District Court for the Northern District of Illinois), 2025L007524 (Cook County); 1:25-cv-11374 and 1:25-cv-11394 (N.D. Ill., consolidated)Remanded
  • State of Illinois ex rel. Lavery v. KalshiEX LLC (private qui tam)U.S. District Court, N.D. Ill., 1:25-cv-14184
  • State of Illinois ex rel. Lavery v. North American Derivatives Exchange, Inc. (private qui tam)U.S. District Court, N.D. Ill., 1:25-cv-10815
  • Illinois Gambling Recovery LLC v. Kalshi Inc. (private; remanded to Cook County)Circuit Court of Cook County

Sources

  1. Illinois Gaming Board cease-and-desist letters page
  2. Illinois Gaming Board memorandum
  3. DeFi Rate
  4. Vultax lawsuit tracker
  5. Colorado Attorney General (coalition press release)
  6. Taft law bulletin
  7. California Attorney General (coalition press release)
  8. N.D. Ill. Memorandum Opinion and Order, No. 1:26-cv-03659, Dkt. 99
  9. HB 5059
  10. Sports betting status