At least one effort is already underway to repeal Illinois’ recently enacted tax on prediction market operators.
- Illinois Rep. Travis Weaver has proposed repealing the state’s new tax on prediction market trades.
- The tax charges 1.75% per transaction, rising to 3.5% after 5 million trades.
- The proposal comes amid regulatory clashes between Illinois, prediction markets, and the CFTC over who has authority to regulate the exchanges.
Republican Rep. Travis Weaver filed H.B. 5811 on Sept. 2, with the legislation proposing to axe Illinois’ tax on “exchange wagers.”
The proposed legislation is still a long way from becoming law, but, if passed, it would remove any references to the prediction market tax from the Illinois Sports Wagering Act. That tax was only signed into law by Gov. JB Pritzker in June and came into effect at the start of July.
Illinois lawmakers passed a prediction market transaction tax on sports-based event contracts overnight as part of the state budget. It would be the first of its kind to "go into effect" on July 1.
— Fairplaygov (@fairplaygov) June 1, 2026
The state expects PMs to pay 1.75% on each wager for the first 5 million… pic.twitter.com/7kLVJgzfvU
The new levy applies a 1.75% tax to the value of any “agreement, contract, transaction, or swap” offered, traded, or executed on a prediction market or exchange tied to a sporting contest or event. After 5 million “exchange wagers,” the rate increases to 3.5% of each transaction.
The Illinois Gaming Board has not yet released its revenue reports for July, so it’s unclear exactly how much revenue the state has realized thus far from the prediction market tax or who has paid it. Nevertheless, the new tax is supposed to be “in addition to all other taxes and payments owed” under the state’s Sports Wagering Act.
While unanswered questions remain and prediction markets continue to operate in the state, Illinois sports betting regulators have indeed tried to take a harder line with the exchanges. To start, the Illinois Gaming Board sent cease-and-desist letters to Polymarket, Crypto.com, Kalshi, and Robinhood over what it alleges is unlicensed sports wagering activity.
CFTC amends lawsuit vs. Illinois to challenge new state law requiring prediction markets to pay a transaction fee to Illinois ranging from 1.75% to 3.5% of the value of each sports-event contract, and files a motion for preliminary injunction to block implementation of new law. pic.twitter.com/8CrjiqqgNg
— Daniel Wallach (@WALLACHLEGAL) June 18, 2026
However, another party interested in shutting down the Illinois exchange-wager fee is the U.S. Commodity Futures Trading Commission (CFTC), which has sued the state over its efforts to crack down on prediction markets.
The CFTC maintains that prediction markets are its exclusive regulatory turf, not that of the states. The agency also amended its lawsuit against Illinois in June to include concerns about the new prediction market tax.
“Defendants’ attempt to regulate CFTC-regulated DCMs and target these DCMs by singling them out for special fees interferes with Plaintiffs’ exclusive authority to uniformly regulate and monitor this congressionally defined market,” the amended lawsuit reads.
