Kalshi sues Illinois over new tax on prediction market sports bets
Summary
Kalshi, a large prediction market platform for sports bets, sued the state of Illinois to stop new laws that would tax and regulate it like a regular sports betting company. Kalshi argues that only the federal government, through the Commodity Futures Trading Commission (CFTC), has the authority to regulate its business nationwide.Key Facts
- Illinois passed a law imposing new taxes on sports bets made through prediction markets like Kalshi.
- Starting July 1, Kalshi would owe 1.75% tax on the first $5 million in sports wagers annually, then 3.5% on additional wagers.
- Illinois requires Kalshi to get a state license costing $15 million for the first four years and $1 million annually after.
- Kalshi filed a lawsuit against Illinois officials, saying the regulations and taxes are too costly and burdensome.
- Kalshi says Illinois is wrongly treating it like a traditional sports betting company, while it believes the CFTC has sole authority over prediction markets.
- The company claims that following Illinois law would force it to restrict users in Illinois, conflicting with federal rules requiring equal access nationwide.
- Illinois aims to regulate prediction markets more tightly after a record $1.5 billion in legal sports betting losses in 2025.
- Meta is considering launching a similar sports betting platform, which increases Illinois’ urgency on regulation.
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