US Government Sues Illinois to Block State From Policing Federally Regulated Prediction Markets
The US DOJ and CFTC are suing Illinois to prevent the state from applying gambling laws to federally licensed prediction markets.Summary
The US Department of Justice (DOJ) and the Commodity Futures Trading Commission (CFTC) filed a lawsuit against Illinois on April 2, 2026, seeking to block the state from regulating prediction markets licensed as Designated Contract Markets (DCMs). The lawsuit argues federal preemption, asserting the CFTC has exclusive jurisdiction over these markets under the Commodity Exchange Act. The action was triggered by cease-and-desist letters sent by the Illinois Gaming Board (IGB) to firms like Kalshi, Crypto.com, and Polymarket, accusing them of unlicensed sports wagering. The CFTC contends these markets fall under federal regulation, not state gambling codes, and Illinois’s actions would recreate a fragmented regulatory system. The plaintiffs seek a declaration that the Illinois statutes are unconstitutional and a permanent injunction against their enforcement, coinciding with the CFTC’s ongoing efforts to clarify rules around prediction markets.
(Source：BeInCrypto)