Illinois Joins C&D Pile-On, Is CFTC Approval Preordained? 

The Illinois Gaming Board has told Kalshi, Robinhood, and Crypto.com to cease and desist. The regulator claims the company is engaging in unlicensed sports wagering.

Illinois joins Ohio, New Jersey, and Nevada in states that have deemed the increasing adoption of sports events contracts to be against state-specific gambling legislation.

In the letter, the Illinois regulator claims the companies are violating the Illinois Wagering Act and Illinois Criminal Code. It emphasizes that under Illinois law, sports wagering is defined as “accepting wagers on sports events or portions of sporting events, or on individual statistics of athletes in sports events or combination of sports events.” 

It continues: “by any system or method of wagering, including, but not limited to, in person or on the Internet through websites or mobile devices.” 

The IGB has said it is “aware” that the companies are engaged in sports wagering in Illinois. It adds that it has not granted a license or authorized the companies to engage in wagering, and consequently, the activity constitutes illegal gambling. 

Unlike other states, the cease and desist letters do not specify a date for cessation. 

CEO Claims States Like Illinois Misunderstand Prediction Markets

The latest blow to event contract exchanges comes less than 48 hours after Ohio took action. Matthew Schuler, an Executive Director at the Ohio Casino Control Commission, commented: “Purchasing a contract based on which team a person thinks will win a sporting event is no different than placing a bet through a traditional sportsbook.” 

Kalshi has responded to C&D orders in Nevada and New Jersey by suing the regulator. Tarek Mansour, the company’s CEO, claimed that the regulators’ orders “fundamentally misunderstand prediction markets and undermine the foundation of U.S. financial markets, which are regulated by the federal government.” 

Wallach: Prediction Markets Heading for Legal Showdown

Industry experts believe that federal intervention will have to come soon. Gaming lawyer Daniel Wallach shared on X the timeline of Kalshi, CFTC appointments, and the current CFTC Commissioner’s views on sports events contracts. 

The views support sports events contracts. Industry suspicions that the CFTC was giving them the green light without publicly saying so seem increasingly true.

In March last year, Quintenz supported contracts based on NFL game outcomes while at the CFTC. Following his resignation from the Commission in November, he joined Kalshi. Kalshi also brought Donald Trump Jr. on board as a strategic advisor in the immediate aftermath of President Trump’s election victory. 

Wallach also points out that a Kalshi lawyer has since joined Elon Musk’s DOGE, who holds a prominent position in the President’s cabal. Quintenz, CFTC Commissioner, commented in 2021: “When we think of commodities, we think of tangible things. Oil, corn, gold. But what about an event? An election? Whether the Summer Olympics will occur in Japan? A football game? Those, too, are commodities!”

Wallach bluntly suggests that the roundtables put on by the CFTC are “all for show” and the result is “preordained.” He expects this CFTC to approve event contracts based on sporting event outcomes. He concludes by asserting that “there will be lawyers.”

This dispute will rumble on for the foreseeable future. If sports betting is effectively being ‘legalized’ at a federal level, where does that leave sports betting regulators and individual state regulation that has taken years to build? How do integrity frameworks fit in with exchanges? What constitutes a breach with regards to CFTC rules on the contracts? 

It’s just getting started.  

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 The Illinois Gaming Board has told Kalshi, Robinhood, and Crypto.com to cease and desist. The regulator claims the company is engaging in unlicensed sports wagering. Illinois joins Ohio, New Jersey, and Nevada in states that have deemed the increasing adoption of sports events contracts to be against state-specific gambling legislation. In the letter, the Illinois
The post Illinois Joins C&D Pile-On, Is CFTC Approval Preordained?  appeared first on CasinoBeats.