Illinois state representative Travis Weaver has introduced a bill to repeal the tax on prediction market transactions three months after it took effect and while Kalshi, the Commodity Futures Trading Commission and Coinbase pursue legal challenges against the state.
House Bill 5811 would strike provisions of the Illinois Sports Wagering Act that impose a levy on exchange wagers — contracts and transactions on prediction market platforms tied to sporting events. The current rate is 1.75% on the first $5m of a platform's transactions per fiscal year and 3.5% on every transaction after that.
The tax was approved as part of the state's fiscal 2027 budget, which also required prediction markets to obtain licences. Repeal would leave untouched the existing taxes on sportsbooks: a progressive rate from 20% to 40% on adjusted gross revenue and a per-transaction fee of $0.25 on the first 20m wagers per year, then $0.50.
The CFTC sued Illinois in April, before the tax passed, challenging the state's attempt to apply gambling laws to prediction markets. After Governor JB Pritzker signed the budget, the regulator expanded the complaint to include the new levy.
Kalshi has been in court with the state since June, arguing that state regulation of a federally registered exchange conflicts with federal commodities law. The platform is also contesting licensing and geolocation requirements. Coinbase filed suit in December 2025, before the tax was enacted.
Even if HB 5811 passes, it will not resolve the jurisdictional dispute over whether states or the federal government regulate prediction markets. The matter may reach the Supreme Court.
