Nearly three months after Illinois Gov. JB Pritzker signed a budget bill that brings prediction markets and their sports event contracts under state regulation, state Rep. Travis Weaver is aiming to repeal the provisions.
Weaver, a Republican, filed HB 5811, which would eliminate the definition of an exchange wager and a provision that taxes such bets. The bill was filed Sept. 2.
The Illinois legislature is not currently in session, but it does have an annual veto session scheduled for Nov. 17-Dec. 3. Urgent issues can be considered during veto sessions. The state’s 2027 session opens Jan. 13. Lawmakers sometimes introduce bills ahead of session as a way to call attention to issues and to begin to educate and lobby fellow legislators.
The language in the budget bill was added late in the legislative session, and the bill passed in the final hours before adjournment. Pritzker signed the bill June 16, and a week later, Kalshi sued the state for the right to continue operating as it does now — under only federal regulation via the Commodity Futures Trading Commission (CFTC).
The commission also sued the state — in addition to Arizona and Connecticut — in what some called an “unprecedented” move. CFTC Chair Michael Selig accused the states of being “overzealous” and said that his agency would “continue to safeguard its exclusive regulatory authority over these markets.”
The Illinois legal cases are among more than 30 involving at least 20 states as the battle rages on over whether sports event contracts are gambling or trades. In the last week alone, the state of New Jersey and Robinhood filed petitions with the U.S. Supreme Court asking it to consider hearing cases and settle the issue, and Kalshi requested an en banc hearing in the Ninth Circuit Court of Appeals, which on Aug. 29 ruled that Nevada could enforce its gambling laws on prediction markets.
NC lawmakers chose to tax, not regulate
States are split on how to handle the sports event contracts offered by prediction markets. Michigan, New York, and Washington have gone to court seeking the right to ban the platforms, and Kalshi is now required to geofence those states and cannot offer sports contracts. Minnesota lawmakers passed a law prohibiting the contracts and was sued days later by the CFTC.
Illinois’ new law is one of three in the U.S. that would tax prediction markets. Kentucky was the first state to pass such a law, and North Carolina lawmakers in July passed a law that will tax prediction markets beginning Jan. 1, 2027, but not make them subject to regulation. Illinois is not currently enforcing its law.
Under the Illinois budget law, prediction markets are required to pay taxes on the same sliding scale (20%-40%) used for online sports betting. It calls for a per-transaction tax of 1.75% on each exchange wager for the first 5 million wagers, and 3.5% after that.
From the outset, it’s been unclear how the law would be enforced, since prediction platforms are federally regulated and have not complied with the state’s gambling licensing requirements.
IGB proposes expanded self-exclusion
The Illinois Gaming Board (IGB) last Friday approved plans to expand the ways that problem gamblers can self-exclude and keep themselves from receiving gambling marketing and advertising. As it stands now, anyone wishing to self-exclude can do so at a casino or other designated site or online, usually via a gambling or wagering platform.
According to Capitol City Now, IGB Administrator Marcus Fruchter said in introducing the changes, “Illinois offers no notarized mail alternative, no treatment provider pathway and no online portal presently in operation as offered in comparable jurisdictions.”
The IGB adopted three amendments, which now go through a state rules approval process before implementation:
- It approved “the necessary authority for the IGB to deploy additional enrollment channels,” per a press release.
- Consumers would now be able to self-exclude for six months, one year, three years, five years, or an indefinite period of time. Up to now, the state has only offered self-exclusion for five years or longer.
- The commission introduced a “marketing exclusion list.” For those on the list, operators would be restricted from sending marketing materials for 12 months after the end of the exclusion period, though individuals would have the option to choose to receive certain materials.
