The U.S. government sued Illinois on Thursday to stop what it called the state’s unlawful efforts to regulate prediction markets.
According to a complaint filed in Chicago federal court, Illinois’ attempt to shut down so-called designated contract markets regulated by the Commodity Futures Trading Commission intruded on the federal government’s exclusive authority to regulate national swaps markets.
The lawsuit is the first by the CFTC to block state gaming regulators from policing operators of prediction markets.
It cited cease-and-desist letters that the Illinois Gaming Board sent to Kalshi, Polymarket and Crypto.com, after the board found reason to believe they violated Illinois gambling laws through their involvement in unlicensed sports wagering.
