Illinois officials are barred from enforcing prediction market laws after a federal judge issued a preliminary injunction. In Utah, DraftKings, FanDuel, Fanatics and PrizePicks have all cut back their sports betting event contracts.
Prediction markets face a federal ruling that blocks Illinois from applying licensing fees, taxes and sports betting licence requirements to CFTC-regulated sports event contracts. DraftKings, FanDuel, Fanatics and PrizePicks have all restricted their Utah event contract products, while Kalshi is seeking a 28-day Supreme Court extension in its New Jersey case.
- Illinois Judge Blocks Enforcement
- Utah Operators Exit Sports Event Contracts
- Kalshi Gets SCOTUS Extension
- Pitch Fixing Trial and New Partnerships
Prediction market laws face a setback in Illinois as U.S. District Judge Martha Pacold entered a preliminary injunction on Friday. The order blocks Illinois officials from applying licensing requirements, fees and taxes to CFTC-regulated sports event contracts, including the 1.75% transaction tax that reached 3.5% after five million transactions in the state’s FY2027 budget. The state’s sports betting licence requirement is now blocked for covered contracts as well.
Pacold’s October ruling found that states may generally tax federally regulated activity, leaving the taxation question open. The injunction expressly covers associated fees and taxes while the matter continues. Illinois has appealed to the Seventh Circuit, where five prediction market cases are now pending, including three Illinois appeals and two in Wisconsin.
Prediction markets face legal pressure across state lines
The injunction formalises an earlier ruling in California and does not finally settle whether sports Prediction event contracts are legal. Illinois officials argue the order leaves the state without its regulatory tools while the appeals continue. Three Illinois cases and two Wisconsin cases now sit before the Seventh Circuit, including Kalshi’s appeal of a May decision allowing the Ho-Chunk Nation’s Indian Gaming Regulatory Act claims to proceed.
The picture is broader than Illinois. Kalshi is also contesting a subpoena issued by New York Attorney General Letitia James for records on advertising, marketing payments, proprietary trading and market making. Kalshi argues the records duplicate issues already under litigation. New York disputes that reading, insisting the subpoena supports a separate probe into potentially deceptive advertising and possible fraud. Paul Clement, the former U.S. solicitor general, will represent Kalshi in its Supreme Court case.
Utah operators exit sports event contracts
Utah’s criminal charges against Kalshi and its founders prompted at least four operators to retreat from sports event contracts. PrizePicks was the first to act, updating its terms on Wednesday to offer only daily fantasy sports player picks in the state. DraftKings followed with financial event contracts only. FanDuel withdrew sports, politics and novelty contracts on Friday, leaving financial contracts available. Fanatics still lists Utah as a market but reports it will stop accepting trades on November 4.
The pullbacks follow Utah’s escalation, including criminal charges filed last week. The Utah federal court is scheduled to hold a status conference in Kalshi’s suit seeking a temporary restraining order and preliminary injunction. Kalshi has not said whether it will remain in the state.
Pitch fixing trial and Kalshi’s NBA deal
Former Cleveland Guardians pitchers Emmanuel Clase and Luis Ortiz are scheduled to begin trial on November 2 in Brooklyn federal court. Prosecutors allege the pair provided gamblers with information about individual pitches and helped them win at least $460,000 through in-game prop bets on pitch speed and outcomes. Clase began sharing information in 2023 and recruited Ortiz in 2025. Both pleaded not guilty to wire fraud conspiracy, money laundering conspiracy and conspiracy to influence sporting contests.
The case arrives as prediction markets push into professional sports more visibly. The Philadelphia 76ers announced a multiyear partnership with Kalshi, becoming the first NBA team to sign directly with the exchange. The deal covers in-arena advertising, digital content, fan promotions and merchandise. Kalshi also sponsored free SEPTA rides after Philadelphia’s game against the New York Knicks. The NBA has separately partnered with Kalshi and Polymarket on data, market integrity and consumer protection. LeBron James signed a $15 million annual endorsement deal with Polymarket.
Sweepstakes ban and this week’s industry watchlist
Oklahoma’s sweepstakes casino ban took effect on November 1 under Senate Bill 1589. The measure prohibits dual-currency casino-style games using virtual currencies redeemable for cash or prizes and extends liability to businesses supporting prohibited operations. Chumba Casino, Stake, High 5 and McLuck have exited the state. Modo has shifted to a free-to-play, Gold Coin-only model.
Other states have followed with restrictions, including Indiana, Maine, Tennessee, Louisiana, California, Connecticut, Montana, Nevada, New York and New Jersey. Illinois’ ban on enforcing the licensing regime adds another layer of uncertainty for prediction market operators as the Supreme Court considers New Jersey’s petition.
AGBrief tracks federal and state prediction market rulings as they are filed.
This week’s calendar adds midterm elections, prediction market court hearings and Q3 earnings. Tuesday’s Second Circuit session will hear Kalshi’s request for an injunction pending appeal against New York. Wednesday brings Robinhood’s Massachusetts appeal to the First Circuit. Election results in Nebraska will decide whether to legalise online sports betting. Flutter reports on Wednesday, followed by DraftKings, PENN and Wynn Resorts on Thursday.
Frequently Asked Questions
What does the Illinois prediction market ruling block?
A federal judge barred Illinois officials from enforcing licensing requirements, associated fees and taxes on CFTC-regulated sports event contracts. The order also blocks specified enforcement actions and subpoenas while appeals continue at the Seventh Circuit.
Why did Utah operators leave sports event contracts?
DraftKings, FanDuel, Fanatics and PrizePicks restricted or withdrew sports event contracts after Utah filed criminal charges against Kalshi and its founders. PrizePicks now offers player picks only, DraftKings financial contracts only, and FanDuel financial and novelty contracts.
When does Kalshi reply in the Supreme Court case?
The Supreme Court granted Kalshi a 28-day extension to respond to New Jersey’s petition, setting the deadline at December 7. Paul Clement, a former solicitor general, will represent the exchange. The court has not yet agreed to hear the case.
When does the Clase and Ortiz trial begin?
Trial begins November 2 in Brooklyn federal court. Clase allegedly began sharing pitch information in 2023 and recruited Ortiz in 2025. Both have pleaded not guilty to conspiracy and money laundering charges, and the trial is expected to last about a month.
What happens with Oklahoma’s sweepstakes casino ban?
The ban took effect November 1 under Senate Bill 1589, which prohibits dual-currency casino-style games using virtual currencies redeemable for cash. Stake, Chumba, High 5 and McLuck have exited; Modo now uses a free-to-play Gold Coin-only model.
Which companies are reporting earnings this week?
Flutter reports on Wednesday, followed by DraftKings, PENN Entertainment and Wynn Resorts on Thursday. The sports betting results matter most as operators decide whether prediction market competition is affecting their regulated sports betting businesses.
This article has been thoroughly researched and reviewed by the CasinoBait editorial team to ensure accuracy and relevance for Asian casino players.
