Illinois’s law would have required a sports betting licence on top of the transaction tax.
The hit
A federal judge has blocked Illinois from taxing or licensing CFTC-regulated prediction markets, siding with Kalshi, Coinbase & the CFTC. US District Judge Martha Pacold’s preliminary injunction, entered on 30 October, formalises her early-October ruling & bars licensing fees, taxes & enforcement action against covered sports-event contracts. Illinois has appealed to the Seventh Circuit, according to Gambling Insider.
Why it matters
Pacold’s earlier ruling found states may generally tax federally regulated activities, but the order does not finally resolve the legality of sports event contracts. The injunction protects covered prediction markets while litigation continues.
The record
| Injunction entered | By Judge Martha Pacold, formalising her early-October ruling (Gambling Insider) |
|---|---|
| Illinois transaction tax blocked | 1.75% rising to 3.5% after 5m transactions, part of the FY2027 budget |
| Cases before the Seventh Circuit | 5 total: 3 from Illinois, 2 from Wisconsin |
| Wisconsin case | CFTC’s appeal of a July ruling denying it an injunction |
| Wisconsin case | Kalshi’s appeal of a May ruling letting Ho-Chunk Nation’s IGRA claims proceed |
What happens next
Watch how the Seventh Circuit handles the Illinois & Wisconsin cases together.
Sources: Illinois appeals to Seventh Circuit after judge blocks prediction markets law · Illinois prediction market injunction, Utah operators exit
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