Kalshi Sues Illinois Over New State Tax on Sports-Related Prediction Markets

Kalshi sued Illinois on June 10, 2024, challenging a new state tax on sports-related prediction markets. The tax, scheduled to take effect on June 15, 2024, imposes a 15% levy on the gross receipts derived from these markets. Kalshi, a regulated exchange for event contracts, argues that the tax is unconstitutional, violating the First Amendment's free speech protections and the Commerce Clause of the U.S. Constitution. The company contends that its prediction markets function as exchanges for information and that the tax unfairly targets interstate commerce. This legal action follows Illinois Governor J.B. Pritzker's approval of the "Gaming Revenue Act" in May 2024, which included the controversial tax provision. Kalshi asserts that the tax is discriminatory and would significantly harm its business operations in Illinois, potentially forcing it to cease offering its services within the state. The lawsuit, filed in the U.S. District Court for the Northern District of Illinois, seeks an injunction to block the enforcement of the tax.