CFTC seeks injunction against Illinois prediction market tax and licensing fee
The CFTC argues that the tax and fee structure regulates trading on federally designated contract markets.
US.- the Commodity Futures Trading Commission has modified its federal lawsuit against the state of Illinois’ bid to tax prediction market operators.
Senate Bill 3019, part of the 2027 budget legislation signed by Governor JB Pritzker, would impose a 1.75 per cent levy on each exchange wager on prediction contracts from July 1. The rate would rise to 3.5 per cent once a platform exceeds five million wagers in a fiscal year.
A related licensing regime requires prediction market operators to obtain a master prediction market licence from the Illinois Gaming Board for a $1m fee.
The CFTC argues that the tax and fee structure regulates trading on federally designated contract markets and that this is preempted by the Commodity Exchange Act. The amended complaint states: “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 original suit challenged cease-and-desist letters from the IGB, asserting that unlicensed prediction market activity constituted illegal gambling under state law. The latest filing follows a similar CFTC intervention in Rhode Island aimed at blocking that state’s application of gambling statutes to CFTC-registered platforms.
