The post CFTC and DOJ Challenge Illinois State Gambling Authority in Federal Court – Regulation Bitcoin News appeared on BitcoinEthereumNews.com.

U.S. Government Sues Illinois Over Prediction Market Rules, Seeks Permanent Injunction The complaint, filed in the U.S. District Court for the Northern District of Illinois, names Gov. J.B. Pritzker, Attorney General Kwame Raoul, and the Illinois Gaming Board as defendants. Federal officials describe it as the first direct federal preemption lawsuit ever brought by the CFTC against a state over event contract markets. The CFTC argues that under the Commodity Exchange Act, it holds exclusive jurisdiction over swaps and event contracts traded on registered designated contract markets. That authority, the agency contends, leaves no room for state gambling laws to apply to platforms operating within that federal framework. Illinois regulators began moving against prediction market operators in April 2025, when the Illinois Gaming Board sent cease-and-desist letters to Kalshi, Robinhood, and Crypto.com, treating sports and political event contracts as unlicensed sports wagering under state law. In January 2026, the board issued similar warnings to Polymarket and notified licensed operators that facilitating prediction markets without a state license constituted illegal gambling. The federal complaint characterizes those enforcement actions as an impermissible intrusion into federal authority. It argues that prediction markets are legally distinct from gambling under federal law, functioning instead as derivatives that serve hedging, price discovery, and information-aggregation purposes. The CFTC has overseen similar markets for more than two decades. CFTC Chairman Brian Quintenz made his agency’s position clear in a February 2026 video address and a Wall Street Journal op-ed, warning that the CFTC would “no longer sit idly by” while states challenged its jurisdiction and telling would-be challengers they “will see you in court.” The April 2 lawsuit follows through on that statement. The DOJ’s participation signals that federal enforcement interest in prediction markets extends beyond the CFTC alone. The two agencies have previously issued warnings about insider…

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Filed under: News - @ April 2, 2026 4:32 pm