Illinois Licensing Requirements Clash with Federal Law, Judge Rules

A US District Judge has granted a partial preliminary injunction in Illinois, siding with Kalshi, Coinbase, and the Commodity Futures Trading Commission (CFTC) against state officials. The ruling, made on October 2, 2026, found that certain Illinois licensing requirements likely conflict with the federal Commodity Exchange Act, which governs swaps and other derivatives.

Kalshi, a CFTC-registered designated contract market since November 2020, began offering trading on sports event contracts in January 2025. These contracts let users take positions on the outcomes of games, which looks a lot like sports betting to state regulators and a lot like derivatives trading to Kalshi. Coinbase entered the picture in December 2025, announcing a partnership with Kalshi to give its users access to those contracts.

The court's ruling does not settle whether Illinois can apply its transaction fee rules to these contracts, and the parties have been asked to propose the specific terms of the injunction. A preliminary injunction is not a final judgment, but it reflects the court's view that the plaintiffs are likely to succeed.