Regulations
By Dan Saada
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What happened. Kalshi is fighting back. The prediction market platform filed a lawsuit against Illinois officials…
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The historical context. It's not the first time a financial tech company has slammed into a state law it didn't see coming…
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Why it matters. The core problem for Kalshi, and for the prediction markets industry more broadly, is that there's…
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What to watch. Three things matter here in the near term. First, whether Kalshi gets an injunction before July 1…
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Kalshi is fighting back. The prediction market platform filed a lawsuit against Illinois officials after the state buried a restriction on prediction markets inside its broader…
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The full details of what the law actually prohibits haven't been fully disclosed publicly, which makes the situation a bit murky.
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Crypto exchanges went through something similar in 2014 when New York's Department of Financial Services rolled out the BitLicense.
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The online poker industry hit a comparable wall in the late 2000s. Legal interpretations of the Unlawful Internet Gambling Enforcement Act of 2006 triggered a wave of crackdowns.
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Related: CFTC Sues 9 States Over Prediction Markets, Kentucky Latest Target
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The core problem for Kalshi, and for the prediction markets industry more broadly, is that there's no federal framework that settles the question cleanly.
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If Kalshi wins in Illinois — or at least gets an injunction that delays the law — that's a meaningful signal to other states thinking about similar moves.
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Lose, and the calculus flips. A clean Illinois win for the state probably emboldens legislators elsewhere.
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Read also: Metas Moneyless Prediction Market Bets on Points Over Cash in Bold Platform Gamble
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From a competitive angle, there's also a geography problem. If prediction markets get squeezed out of large states with restrictive laws, activity concentrates in friendlier…
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The law takes effect July 1. Kalshi's legal team is presumably moving fast. No details yet on whether a hearing date has been set.
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