Illinois Includes Sports Prediction Market Tax in New Budget

(AsiaGameHub) –   Illinois legislators have added taxes targeting sports prediction markets to the state’s most recent budget. This policy is widely expected to face pushback from industry operators as well as the Commodity Futures Trading Commission (CFTC).

The new budget applies a 14.25% tax rate to either the transaction fees or adjusted revenues of prediction market operators. It is still unclear if affected companies will choose to abide by this new regulatory requirement.

The CFTC previously filed a lawsuit against Minnesota after that state enacted a new law placing restrictions on prediction markets. The agency asserts it has sole regulatory authority over prediction markets, and has actively pushed back against all efforts by states to oversee the sector.

Illinois’ new tax marks another instance of a state seeking to assert control over the operations of platforms licensed by the CFTC.

Illinois “Addicted To Spending Money”

Over the past several years, Illinois has increased taxes on the gambling sector on multiple occasions. Last year, after raising the revenue tax rate for the industry, the state added a per-wager fee for sportsbooks. The city of Chicago subsequently introduced its own tax on sports betting operators as part of its municipal budget.

Industry firms have pushed back against these tax hikes, with the Sports Betting Alliance (SBA) launching a legal challenge against the city of Chicago back in December.

Either the CFTC or prediction market operators including Kalshi could opt to pursue similar legal action in response to the new prediction market taxes.

State Representative Blaine Wilhour, a Republican serving in the heavily Democratic state, stated that these tax increases stem from Illinois’ failure to rein in its spending.

“This state is addicted to spending money it doesn’t have,” Wilhour said, as reported by ABC7. “It’s addicted to creating programs that it can’t afford. It’s addicted to making promises it can’t keep, and it’s addicted to coming back to the taxpayers constantly, constantly to clean up the mess.”

Democratic Representative Diane Blair-Sherlock pushed back on Wilhour’s criticism, arguing that the root of the issue is federal spending practices.

“I will not be lectured about excessive state spending at a time when I am watching billion- dollar ballrooms being built, private jets being flown around by staff to go to their girlfriend’s concerts, while SNAP benefits are cut, while Medicaid is cut, while Medicare is cut, while people are desperately trying to get health care,” she said. “We as a state are trying to fill in gaps created by the federal government.”

Trump and Pritzker Lock Horns On Prediction Markets

Governor JB Pritzker gave final approval to last year’s gambling tax hikes, and is now tasked with signing off on the new prediction market tax. He had previously greenlit an executive order designed to stop state employees from using non-public information to trade on prediction markets.

Last week, President Donald Trump referred to Pritzker as “SCUM” during a tirade targeting people who oppose prediction markets. The governor, who has been an outspoken critic of the president, alleges Trump is defending the industry solely to benefit his family’s business interests.

Illinois took action to prevent and ban insider trading with online prediction markets in our state.

The most corrupt President in our nation’s history wants to make sure states like ours can’t regulate prediction markets so his family and administration can keep profiting. pic.twitter.com/JZyS3aqNfA

— Governor JB Pritzker (@GovPritzker) May 26, 2026

Trump Media has entered a partnership with Crypto.com, and Donald Trump Jr. serves as a strategic advisor for both Kalshi and Polymarket. His venture capital firm, 1789 Capital, also holds an investment stake in Polymarket.

DFS, Social Media Also Targeted With New Taxes

Alongside the proposed prediction market tax, daily fantasy sports operators have also been levied a 15% tax. Per estimates from state legislators, this levy will bring in $5 million during the 2027 fiscal year.

Social media firms will also face new tax obligations. Modeled after the per-wager tax applied to gambling services, Pritzker has put forward a new fee that ranges from $0.10 to $0.50 per Illinois-based user each month, with the exact rate determined by the total size of each platform’s user base. 

When the earlier gambling tax was introduced, most operators passed the cost of the fee directly to consumers, while some other firms increased their minimum wager amount. Social media operators could similarly decide to begin charging Illinois residents for access to their platforms. This fee is projected to raise $200 million in extra revenue for the state.

All of these tax and revenue adjustments are included in Senate Bill 3019, which passed the state House of Representatives by a 73-41 vote before receiving approval from the state Senate. The bill now awaits Pritzker’s signature to become law.