An Illinois lawmaker wants to force prediction market platforms to be licensed and pay state taxes.
Key Takeaways
- SB 4168 would give Illinois regulators power to go after “illegal” prediction market platforms.
- Trading exchanges would have to pay the state 50% of their adjusted gross revenue.
- Another Illinois bill is also looking to regulate prediction markets.
Sen. Michael Hastings introduced the Prediction Market Regulation and Taxation Act on Thursday, a bill that would require trading exchanges that offer event contracts to obtain a “master” licesne after paying a $1-million annually renewable fee.
Under SB 4168, prediction companies would have to pay the state 50% of their adjusted gross revenue, and the proposed law would also charge unlicensed operators with illegal gaming.
Illinois regulators would have the power to deliver cease-and-desist orders, civil penalties, or referral for criminal prosecution. The Illinois Gaming Board would also be able to revoke licenses.
Prediction markets like Kalshi and Polymarket believe they have the right to operate in 50 U.S. states while regulated federally by the Commodity Futures Trading Commission.
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Other attempt
This is the second legislative action taken by Prairie State lawmakers this year. HB 5059 was introduced in the House by Rep. Edgar Gonzalez Jr. in February.
The ORACLE Act proposes oversight and regulations of prediction markets, including an age requirement, bans on certain types of markets, and responsible gaming measures.
That bill had its first reading Feb. 10 and was referred to the Gaming Committee on Wednesday.
Not alone
Illinois is taking aim at prediction market sites at a time when other states and even Congress is asking for more regulation of event contract exchanges, including ones that offer sportsbook-like markets on the NFL, MLB, NBA, college sports, and other sports that are licensed and regulated in the Prairie State.
Prediction market platforms are involved in legal battles in several states, including Nevada and Massachusetts. States with legal sports betting are attempting to keep trading exchanges from offering sports contracts.
Prediction markets have exploded over the last year. Not only have Kalshi and Polymarket grown in popularity, but big-name sports betting brands DraftKings and FanDuel entered the trading exchange space with platform launches in late 2025.
Two U.S. senators introduced a bill Thursday that would ban public officials, including the President, Vice President, and members of Congress, from using prediction markets for financial gain, citing insider information concerns.
