US government sues Illinois, alleging unlawful efforts to regulate prediction markets

Booming prediction market sites, such as Kalshi and Polymarket, face scrutiny from states and Congress Sign up for the Breaking News US email to get newsletter alerts in your inbox The US government sued Illinois on Thursday to stop what it described as the state’s unlawful efforts to regulate prediction markets. The booming industry of online prediction markets – which allow users to bet on virtually anything from Oscar winners to the weather to ongoing military conflicts – has been facing greater scrutiny as companies continue to fight state-led efforts to regulate the fast-growing industry – which many argue is “basically gambling but with another name”. The platforms are less regulated that conventional betting sites because they classify their offerings as “event derivatives”, which means they fall under federal commodities law and are currently overseen by the Commodity Futures Trading Commission (CFTC) rather than by state gaming regulators. This means they are available in all 50 states to users 18 and older. Licensed sportsbooks can only operate in states where sports betting has been legalized and, unlike casinos or traditional sportsbooks, users in effect bet, or “trade”