Kalshi sued Illinois over SB 3019, Illinois’s new push to regulate sports betting offered through Kalshi’s prediction-market platform. The company asked for emergency court relief to stop Illinois from enforcing the law before it took effect on July 1, 2026.
According to Kalshi’s complaint, SB 3019 amended the Illinois Sports Wagering Act to broaden “sports wagering” to include an “exchange wager” tied to a sporting contest or event that is offered, traded, or executed on a prediction market. The complaint also alleged SB 3019 barred designated contract markets (DCMs) from offering sports event contracts unless they obtain an Illinois license and limit those contracts to Illinois residents.
Kalshi said SB 3019 provisions would subject it to criminal penalties in Illinois unless it stopped offering Illinois residents sports event contracts or complied with the state’s licensing and regulatory regime. In its filing, Kalshi also argued that the “event contracts” it offers should be exclusively regulated by the federal Commodity Futures Trading Commission (CFTC).
Kalshi asserted it operates a CFTC-permitted DCM for trading sports event contracts. The complaint further alleged SB 3019 would force licensed entities to accept trades only from persons “physically located in the State,” and Kalshi said it could not comply with that state-specific requirement without violating the CFTC’s “impartial access” obligation for DCMs.
The new Illinois requirements also included taxes and fees specific to prediction-market wagers. WIFR reported that SB 3019 set a 1.75% tax on the first 5 million sports wagers per fiscal year made on prediction markets, followed by a 3.5% tax on wagers after that threshold, and WIFR reported an initial online or mobile sports wagering operator license fee of $15 million for four years with $1 million four-year renewals.
The dispute also sits alongside a broader federal position on prediction markets. According to the CFTC’s April 2, 2026 press release, the CFTC said it has “clear and longstanding exclusive jurisdiction” to regulate event contracts under the Commodity Exchange Act and that it would defend market participants against “overzealous state regulators,” with the CFTC continuing legal action in the face of state regulatory steps.
Kalshi’s emergency request sought a temporary restraining order and preliminary injunction aimed at preventing enforcement of SB 3019 before July 1, 2026.
