The US Department of Justice and the Commodity Futures Trading Commission (CFTC) filed a lawsuit against the State of Illinois on April 2, 2026.
The agencies seek a permanent injunction barring the state from applying its gambling laws to federally licensed Designated Contract Market (DCM) operators.
The case is docketed in the Northern District of Illinois (No. 1:26-cv-03659). Defendants include the State of Illinois, Governor JB Pritzker, Attorney General Kwame Raoul, and five officials from the Illinois Gaming Board.
Related: Polymarket Tops $1 Million in Daily Fees for First Time After Commission Hike
Federal Regulator’s Core Argument
The CFTC argues that under the Commodity Exchange Act, the agency holds exclusive jurisdiction over swaps and futures traded on federally regulated exchanges. States have no authority to intervene in this area or apply their gambling laws to such platforms.
The lawsuit responds to cease-and-desist letters the Illinois Gaming Board sent to Kalshi, Crypto.com, Robinhood, and Polymarket. The CFTC deems these demands unlawful because event contracts structured as swaps fall exclusively under federal regulation.
Context and Potential Consequences
The agency filed similar lawsuits against Arizona and Connecticut on the same day. The CFTC emphasizes that Congress deliberately replaced fragmented state regulation with a unified federal system in 1974 to ensure consistent market access rules nationwide.
The court’s ruling could set an important precedent. It may define the boundaries of state authority over CFTC-licensed Designated Contract Markets in the prediction markets space.
Related: What’s Happening With Prediction Markets in the US: A Look at Recent Initiatives
