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Kalshi sues Illinois over prediction market taxes and licensing rules
Kalshi filed suit against Illinois, seeking to block taxes and licensing requirements that would treat the company as a sports betting operator from 1 July, according to the report. The company argues its event contracts fall under exclusive CFTC oversight, while Illinois authorities contend the products are sports betting. Illinois Attorney General Kwame Raoul’s office said it was reviewing the complaint.
Nevada challenges Kalshi’s preemption argument over North Carolina prediction market tax
Nevada argues in the Ninth Circuit that Kalshi’s reliance on North Carolina’s prediction market tax weakens its preemption case. Kalshi had cited the tax to argue that states can impose taxes alongside federal oversight.
Prediction market coalition challenges Kentucky's 14.25% transaction tax
A coalition including Kalshi, Crypto.com and Polymarket has sued Kentucky over a 14.25% tax on prediction market operators’ transaction fees, according to the lawsuit. The plaintiffs argue that the levy is discriminatory and conflicts with federal law; Kentucky Attorney General Russell Coleman said his office would defend the law. Kalshi said the tax could drive users towards unregulated platforms.
Underdog challenges Connecticut over sports prediction markets
Underdog filed a federal lawsuit challenging Connecticut’s application of state gambling rules to its sports event contracts, seeking an injunction against the Department of Consumer Protection and Attorney General William Tong. The filing follows a state order telling nine platforms to stop offering and advertising the contracts while allowing users to withdraw available funds; Connecticut says the products require state licences.
Tax Law Center urges wagering tax treatment for US sports prediction contracts
It was reported that the Tax Law Center published an analysis on 1 October arguing that US sports prediction contracts qualify as wagers for federal taxation. Its interpretation would bring these contracts within gambling provisions covering excise taxes, winnings and loss deductions. The analysis calls for IRS clarification to reduce uncertainty.
An analysis from the Tax Law Center, dated Oct. 1, examines whether contracts tied to sporting events on venues like Kalshi belong within the federal rules that govern gambling. The center's position is that such contracts amount to wagers for federal tax purposes.