Kalshi is taking the state of Illinois to court over its new law putting in place a regulatory regime for prediction markets, which the platform says puts it at odds with the federal government.
The company filed a complaint this week in the U.S. District Court for the Northern District of Illinois against Illinois Attorney General Kwame Raoul, Governor JB Pritzker, and other state officials. The platform says it will be "irreparably harmed" when the new law takes effect on July 1.
Last week, Pritzker signed into law broad budget and revenue legislation, SB3019, that does a number of things, including, controversially, enacting a 0.2% charge on the value of digital asset transactions or services provided to Illinois customers as well as requiring prediction market platforms to get a state license. In its complaint, Kalshi says those requirements are preempted by federal law because its event contracts are regulated at the federal level.
The dispute is the latest chapter in an ongoing battle between federal and state regulators over who has authority over prediction markets, particularly those tied to sporting events. The Commodity Futures Trading Commission, under lone commissioner Chair Michael Selig, has argued that his agency has "exclusive jurisdiction" over prediction markets and that states are overreaching. Meanwhile, states say that platforms are violating local gaming and gambling laws.
