- The Illinois Gaming Board has issued three cease-and-desist notices for sports event contract markets
- The regulatory board sent the orders to Crypto.com, Kalshi, and Robinhood
- Illinois joins New Jersey, Ohio, and Nevada as states taking action against the sports event contract markets
Illinois is the latest state to level a haymaker at the sports event contract market companies.
The Illinois Gaming Board has issued cease-and-desist notices to Kalshi, Crypto.com, and Robinhood, ordering the companies to stop offering their sports event prediction contracts to Illinois residents.
The Illinois Gaming Board notes the companies are believed to be “engaging in unlicensed sports wagering in violation of the Illinois Sports Wagering Act.”
Latest State to Take Action
The Illinois Gaming Board has ordered the companies to cease offering the “illegal activity.” No deadline to comply was included in the notices. Failure to do so, the board notes, may subject the companies to civil or criminal penalties.
The board notes it is unlawful for companies to knowingly establish, maintain, or operate an internet site that permits a person to play a game of chance or skill for money or make a wager upon the result of a sport, game, contest, election, or political nomination.
“Under Illinois law, ‘sports wagering’ means accepting wagers on sports events or portions of sporting events, or on individual statistics of athletes in sports events or combination of sports events, by any system or method of wagering, including, but not limited to, in person or over the internet through websites or on mobile devices,” Marcus D. Fruchter, Administrator, wrote in the orders.
Illinois is the latest state to take action against the companies. New Jersey and Nevada recently sent cease-and-desist notices to both Kalshi and Robinhood, while Ohio also sent notices to Kalshi, Robinhood, and Crypto.com.
So what happens next? Will the companies remove the markets, or will Kalshi levy legal action as it did in New Jersey and Nevada?
Will Kalshi Sue in Illinois?
As more states are starting to follow suit and send cease-and-desist notices to companies offering these types of markets, it remains to be seen how many states Kalshi will sue for their actions.
KalshiEX filed lawsuits against both the New Jersey Division of Gaming Enforcement (NJ DGE) and Nevada Gaming Control Board (NGCB) this past week for cease-and-desist notices sent to the company regarding their sports event prediction markets.
The company believes neither of the state regulatory bodies have the right to intrude on the government’s “exclusive” authority to regulate prediction markets.
Counsel for Kalshi argues that Congress previously gave the Commodity Futures Trading Commission (CFTC) exclusive jurisdiction to regulate futures trading on approved exchanges. As the CFTC has allowed Kalshi to launch its sports event contract markets, state law cannot “intrude on the comprehensive federal scheme for regulating designated exchanges.”
Kalshi Co-Founder and CEO Tarek Mansour recently took to social media to defend the company’s lawsuits against the state regulatory bodies.
“While they are not our regulators, both states have issued cease and desist orders that fundamentally misunderstand prediction markets and undermine the foundation of U.S. financial markets, which are regulated by the federal government. We have made every effort to engage proactively with both Nevada and New Jersey and try to educate them about prediction markets, how they are regulated, and how critical they are… but our words fell on deaf ears,” he wrote.
Kalshi could very well follow suit and sue the Ohio Casino Control Commission and Illinois Gaming Board for the cease-and-desist notices.
Illinois Cracks Down on Illegal Betting in Sports Event Contract Markets
In recent years, the state of Illinois has been cracking down on illegal betting in sports event contract markets. This crackdown comes as a response to the increasing popularity of sports betting and the rise of illegal gambling operations in the state.
Sports event contract markets, also known as sports betting markets, are where individuals can place bets on the outcome of sporting events. These markets have become increasingly popular in recent years, with many states legalizing sports betting in an effort to generate revenue and regulate the industry.
However, with the rise of legal sports betting, there has also been an increase in illegal gambling operations that operate outside of the regulatory framework. These illegal operations often target vulnerable populations and can lead to financial ruin for those who participate in them.
To combat this issue, Illinois has been taking steps to crack down on illegal betting in sports event contract markets. One of the key ways that the state is doing this is through increased enforcement efforts. The Illinois Gaming Board, which regulates sports betting in the state, has been working closely with law enforcement agencies to identify and shut down illegal gambling operations.
Additionally, Illinois has implemented strict penalties for those who are caught participating in illegal sports betting activities. Individuals who are found to be involved in illegal gambling operations can face fines, jail time, and even the loss of their gambling licenses.
In addition to enforcement efforts, Illinois is also working to educate the public about the dangers of illegal sports betting. The state has launched public awareness campaigns to inform residents about the risks associated with illegal gambling and to encourage them to report any suspicious activity.
Overall, Illinois is taking a strong stance against illegal betting in sports event contract markets. By increasing enforcement efforts, implementing strict penalties, and educating the public, the state is working to protect its residents from the harms of illegal gambling operations.
