Illinois has joined the list of US states that are taking action to prevent trading platforms from encroaching on their regulated sports betting markets.
Following similar recent moves by gambling regulators in New Jersey, Nevada and Ohio, the Illinois Gaming Board (IGB) this week issued cease-and-desist letters to three trading platforms that offer event-based contracts on sports.
The IGB letters to trading platforms Kalshi, Robinhood and Crypto accuse the companies of engaging in online sports betting activities in Illinois without state authorisation.
“Under Illinois law, ‘sports wagering’ means accepting wagers on sports events or portions of sporting events, or on individual statistics of athletes in sports events or combination of sports events, by any system or method of wagering […],” the IGB states in its cease-and-desist letters.
“No person or entity may engage in a sports wagering operation or activity in Illinois unless licensed by the IGB.”
The letters advise Kalshi, Robinhood and Crypto that their sports wagering activity is neither licensed nor authorised by the IGB, which constitutes illegal gambling in violation of Illinois law.
This is the same legal argument that was used by gambling regulators in New Jersey, Nevada and Ohio to order trading platforms to withdraw their sports event contracts from those markets.
The trading platforms claim that they are authorised to offer this type of contract under their licenses from the Commodity Futures Trading Commission (CFTC), although the CFTC itself is opposed to the sports contracts and recently prohibited Robinhood from offering contracts on the Super Bowl.
Kalshi chief executive Takek Mansour said last week that the company is launching a legal challenge against the states’ efforts to prohibit it from offering sports contracts.