Kalshi sued Illinois Wednesday, claiming in federal court that the state has no right to levy taxes on prediction markets.
In taxing such wagers, Illinois asserted that sports-related prediction markets are a form of state-regulated sports betting—and not swaps overseen by the CFTC at the federal level, as industry leaders and President Donald Trump’s administration have argued.
Now, Kalshi has sued the government of Illinois, arguing the state has no right to tax its sports-related income—which does not, it says, constitute gambling-related revenue.
Kalshi’s lawsuit follows the lead of the Trump CFTC, which last week amended an existing lawsuit against Illinois to protest the state’s new tax. The CFTC also filed a motion for preliminary injunction seeking to prevent Illinois from instituting the law next week.
Lawsuits on the subject are ongoing in nearly every federal jurisdiction at this point, and the issue is therefore likely to ultimately be decided by the U.S. Supreme Court.
