Illinois Bill Would Ban Sports-Related Trades In Prediction Markets
An Illinois lawmaker dropped a bill Thursday that would put some of the strictest guardrails in the country around prediction markets like Kalshi and Polymarket — including an effective ban on sports-related trades inside the state.
The proposal, titled the Oversight and Regulation of Activity for Contracts Linked to Events (ORACLE) Act, targets prediction market platforms that allow users to buy and sell speculative contracts tied to real-world outcomes — the same model at the center of ongoing state-vs-federal fights involving sports and election markets.
At its core, the bill would shut the door on sports-related prediction market trades in Illinois, while layering on a sweeping set of consumer protections, advertising limits, and enforcement powers.
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The bill (HB 5059) authored by State Rep. Edgar Gonzalez Jr. doesn't mince words in terms of whether you call it an “event contract,” a “prediction market,” or a “financial instrument.” If people are trading on sports outcomes, Illinois wants it regulated like gambling . . . or not operating at all.
The bill is Illinois’ most aggressive move yet in the growing national pushback against sports-events contracts. It effectively draws a hard line that says: "If it walks like sports betting and tweets odds like sports betting, don’t try selling it as Wall Street cosplay."
What the ORACLE Act Would Do In Illinois
Ban Sports-Related Trades On Prediction Markets
The bill prohibits certain categories of prediction markets, a move widely interpreted as blocking contracts tied to sporting events — even if those markets are offered under federal commodities law. This is a bone to the state's licensed sports betting operators. DraftKings, FanDuel, and Fanatics all operated prediction market platforms. But they do not trade sports-event contracts in Illinois, where they are currently licensed to operate online sports betting.
Last week, the Commodities Futures Trading Corporation Chair Michael Selig said the CFTC would drop its opposition to sports-related contracts, and join any federal litigation to protect the CFTC's turf.
Raise The Minimum Age To 21
Platforms would be barred from allowing anyone under 21 to register or open a speculative position, aligning prediction markets more closely with state-regulated sports betting standards
Force Platform-Wide Exclusions
Prediction market operators would be required to exclude specific individuals from participation, similar to self-exclusion lists and prohibited-person rules used by sportsbooks and casinos.
Impose Responsible Gaming Mandates
Operators would have to implement and follow responsible gaming measures, signaling lawmakers’ intent to treat prediction markets like gambling products — not financial tools.
Clamp Down On Ads & Promos
The bill restricts:
- Advertising practices
- Credit-based wagering products
- Gift certificates
- Certain market-making activities
All of which mirrors restrictions already common in regulated sports betting.
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Require Fraud & Manipulation safeguards
Platforms would need to deploy “commercially reasonable and technically feasible” systems. Those would detect and prevent fraud, manipulation, or other abusive trading behavior.
Attorney General In Charge Of Enforcement
Violations would carry penalties. The llinois Attorney General would be authorized to write rules and enforce the law.
Act Latest Step In An On-Going Nationwide Battle
Illinois’ ORACLE Act is the latest signal yet that states are done waiting for federal clarity on prediction markets like Kalshi and Polymarket— especially when sports are involved.
Not everyone is impressed with the ORACLE Act.
"These bills are such time-wasters because until the courts resolve the federal preemption issue that is currently the subject of multi-circuit, multi-year litigation, any state efforts to regulate PMs--under ANY state law--will get jammed up in the current preemption quagmire," gaming industry attorney Daniel Wallach posted on X.
Rather than arguing jurisdiction with the CFTC or courts, this bill simply draws a bright red line: if it looks like sports betting, feels like sports betting, and attracts sports bettors, Illinois wants it regulated — or gone.
It’s another flashpoint in the widening clash between state gambling regulators and federally regulated prediction market platforms.
Here's a quick look at 3 other key states in the fight.
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New Jersey: “Cease and desist now” & Federal Court Fight Later
New Jersey’s playbook started with the Department of Gaming Enforcement hitting prediction-markets with a cease-and-desist order. It demanded they stop and void sports wagers/contracts.
Then it escalated into the main event. Kalshi sued, arguing federal commodities law preempts state gambling enforcement — and the fight moved into the courts and appeals pipeline.
How it compares to Illinois: NJ is mostly enforcement + litigation (regulator action, then preemption fight). Illinois is saying: even if you want to argue federal jurisdiction, here’s a state statute built to wall off sports-event contracts. Meanwhile, it would implement the same rules that apply to sports book.
Nevada: The Court Swing State
Nevada has become the “this is sports betting, stop calling it a spreadsheet” jurisdiction.
A federal judge initially gave Kalshi relief in spring 2025 — then reversed course in late 2025. That effectively reopened the door for Nevada gaming regulators to enforce state law against sports event contracts. Polymarket and Coinbase have since been banned from trading sports-events contracts in the state.
How it compares to Illinois: Nevada’s pressure is court-driven and regulator-driven (and it’s moving fast around tentpole events like the Super Bowl). Illinois is trying to lock in a durable statutory framework. It avoids a single TRO going the wrong way.
Massachusetts: 1st Injunction Win Against Sports-Event Contracts
Massachusetts delivered one of the clearest early wins for the “these are unlicensed sports wagers” side. The AG sued and secured a preliminary injunction preventing Kalshi from offering sports-related event contracts without a sports wagering license.
How it compares to Illinois: MA’s approach is state AG enforcement via courts (injunction to stop the product). Illinois’ ORACLE Act would give its AG statutory hooks to regulate/penalize platforms directly — age gating, ad rules, credit restrictions, market-making limits. That goes beyond a “this is gambling” in a single injunction fight.
The Bigger Trend Line (and why HB5059 matters)
Put them together and you get the national pattern:
- NJ: regulator action → preemption litigation
- NV: regulator action → injunction → reversal → more enforcement
- MA: AG lawsuit → injunction against sports event contracts
- IL: fine, we’ll legislate it → ORACLE Act to box out sports-style trading and regulate the rest like gambling
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