Illinois Sports-Wagering Licensing Rules Blocked by Federal Judge

A federal judge granted partial injunctions to Kalshi and Coinbase against the state of Illinois. The ruling, by U.S. District Judge Martha M. Pacold, blocks Illinois from applying its sports-wagering licensing requirements and related criminal provisions to the Kalshi-listed contracts at issue. The contracts in question, which include one tied to the 2026 World Series, likely fall under federal commodities law and conflict with Illinois' rules, the judge found. Pacold reserved a decision on the state's wagering fees, including a 1.75% fee on the first five million sports-related exchange wagers in a fiscal year and 3.5% on those beyond that threshold. Illinois' licensing rules, the judge concluded, would impose conflicting rules on federally regulated markets and would control which contracts the exchanges could offer and who could trade them. The decision puts federal district courts in Illinois and Wisconsin on opposing sides of the dispute over state authority to regulate sports-event contracts. A Wisconsin judge denied the CFTC similar relief in July, and that case is now before the Seventh Circuit Court of Appeals.