Federal Judge Blocks Illinois From Licensing Sports Prediction Markets, Citing Federal Preemption
A federal judge has blocked Illinois from requiring state gambling licenses for sports prediction-market contracts, ruling that federal law likely preempts the state's authority, NPR Illinois reported on October 8.
U.S. District Judge Martha Pacold of the Northern District of Illinois issued a preliminary injunction on October 2 in the case brought by Kalshi, Coinbase and the Commodity Futures Trading Commission against Illinois Attorney General Kwame Raoul. The court found that sports-event contracts offered by federally regulated exchanges may qualify as "swaps" under the Commodity Exchange Act, placing them within the CFTC's exclusive jurisdiction.
The ruling means Illinois cannot, for now, force prediction-market operators to obtain state gaming licenses or treat the contracts as illegal gambling. The court did not rule on a separate new Illinois fee of 1.75% to 3.5% on prediction-market transactions, which remains subject to further argument.
Courts are divided on the issue: a federal judge in Wisconsin reached the opposite conclusion, holding that state gambling laws can apply to such contracts. The split increases the odds the dispute will eventually require higher-court resolution.
Published by GSM · USA (original Chinese edition)
Photo: Ken Lund, CC BY-SA 2.0 (Wikimedia Commons)
