Illinois Gaming Regulators Warn License Holders About Sports Prediction Market

• The Illinois Gaming Board recently issued a memorandum to its sports betting license holders
• The board warned the operators that sports prediction contracts are akin to illegal sports betting
• Engaging in the market may impact an operator’s suitability for licensure in Illinois

The Illinois Gaming Board is the latest state regulatory board to warn its license holders about the sports prediction market.

As first reported by Dustin Gouker and the Event Horizon substack, the Illinois Gaming Board issued a memorandum to its sports betting license holders, warning operators that sports event contracts are akin to illegal sports betting and may impact an operator’s suitability for Illinois sports betting licensure.

“If a party engages in or facilitates illegal gambling activity, such conduct may impact that party’s suitability for licensure in Illinois. Additionally, suitability for Illinois licensure may be impacted by activity that violates the gaming laws or rules of another state or tribal government, as well as the extent to which a party is partnering or associating with another party that is engaged in such activity,” the letter notes.

Latest State to Warn of Prediction Markets

Illinois is the fifth state to warn its licensed sports betting operators to not participate in the sports event contract market. No person or entity may engage in sports betting in Illinois unless licensed by the Illinois Gaming Board, the memorandum reminds its operators, and “prediction markets” constitute illegal gambling activity under Illinois law.

“Parties that participate in or facilitate such activity in Illinois without IGB licensure or authorization are engaged in illegal gambling.”

The Illinois Gaming Board was one of the first state boards to levy cease-and-desist notices to Kalshi, Crypto.com, and Robinhood. The board issued the notices this past April, ordering the prediction market companies to stop offering their sports event prediction contracts to Illinois residents.

“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.

More States Issuing Warnings

Illinois is the fifth state to issue an official warning to its license holders regarding prediction markets. Two weeks ago, the Nevada Gaming Control Board issued a similar letter to its license holders, warning operators to not offer these types of contracts in or outside of Nevada. It also warned them to not partner with any companies that offer these types of contracts anywhere in the U.S.

If found to be engaged in this market in any way, the gaming control board warned it “may call into question the good character and integrity of the licensee.”

The Ohio Casino Control Board issued a similar warning – and cease and desist letters to prediction market companies – in March. Kalshi filed a lawsuit against the state’s board and attorney general following the notice and warning letter to operators.