Kalshi Sues Illinois Over New Prediction Market Law

The prediction market platform Kalshi has filed a lawsuit against the state of Illinois, seeking to block a new law that would require it to obtain a state license and pay fees. The company argues the state's requirements are preempted by federal law and has asked a federal court for an injunction before the law takes effect on July 1.

Kalshi filed its complaint this week in the U.S. District Court for the Northern District of Illinois. The defendants include Governor J.B. Pritzker, Attorney General Kwame Raoul, and other state officials. The legal action targets provisions within SB3019, a broad budget and revenue bill that Governor Pritzker signed into law last week. The legislation mandates that operators of prediction markets secure state authorization to do business with Illinois residents and imposes a 0.2% fee on certain digital asset transactions and services.

In its filing, Kalshi contends that its event-based contracts are regulated exclusively by the Commodity Futures Trading Commission under the Commodity Exchange Act. The company is registered with the CFTC as a designated contract market. Kalshi asserts that Illinois lacks the authority to impose a separate...