Are prediction markets legal in Illinois?

Illinois says prediction markets are gambling and passed a 2026 law requiring licences and taxing sports event contracts. On October 2, 2026 a federal judge partly blocked that law for Kalshi, Coinbase and the CFTC. Kalshi and Polymarket remain available.

Prediction markets are available in Illinois but legally contested. As of October 17, 2026, Illinois treats them as gambling and has passed a law to license and tax sports event contracts. A federal judge partly blocked that law on October 2, 2026, and the final scope of her order was still being settled. Kalshi, Polymarket US, Novig and PredictIt all remain available.

Illinois’s position

Illinois licenses online and retail sports betting through the Illinois Gaming Board. The Sports Wagering Act says a bettor “shall be at least 21 years of age.” The Board has acted repeatedly against prediction markets:

• April 1, 2025: cease-and-desist letters to Kalshi, Crypto.com and Robinhood. Kalshi’s says it must “cease and desist this illegal activity.”
• October 23, 2025: a memorandum stating that prediction markets are gambling under Illinois law, and warning licensees about partnerships.
• January 27, 2026: a cease-and-desist to Polymarket US.

The 2026 law and the court fight

A budget law signed in June 2026 and effective July 1 makes sports event contracts “exchange wagers” that only licensees may offer. It also taxes them at 1.75% of contract value for the first 5 million contracts a year and 3.5% above that, as reported by Covers. Non-sports contracts are exempt. The CFTC had already sued Illinois in April 2026, and Kalshi and Coinbase sued in June.

On October 2, 2026, US District Judge Martha Pacold granted a partial preliminary injunction. She found that “some Illinois law is likely preempted,” reportedly blocking the licensing rules, but she held off on the tax: “taking a cut of Kalshi and Coinbase’s profits, without more, might not pose the same conflict.” The parties were told to file a proposed order by October 29 (reported by the Chicago Sun-Times). A bill to repeal the tax, HB 5811, is expected in the 2027 session.

Other platforms

• Novig and PredictIt: no Illinois action found.
• Robinhood: received the April 2025 cease-and-desist; still available.
• DraftKings and FanDuel don’t offer sports contracts in Illinois, where they run licensed sportsbooks.

See is Kalshi legal?, is Polymarket legal? and our legality tracker.

Not legal or betting advice. 18+ (21+ where required). Prediction markets involve risk of loss — only trade what you can afford to lose. Gambling problem? Call or text 1-800-MY-RESET (National Problem Gambling Helpline, 24/7).