Martha M. Pacold

[upbeat music] A federal judge has delivered a major victory to prediction market platform Kalshi, ruling that its event-based contracts resemble federally regulated financial swaps rather than state-regulated gambling.

Crain's John Pletz reports that US District Judge Martha Pacold issued a preliminary injunction Friday blocking Illinois officials from enforcing state gaming regulations against the company.

The legal battle began when Kalshi, alongside crypto exchange partner Coinbase and the Commodity Futures Trading Commission, filed a lawsuit against Illinois.

The coalition challenged state plans to regulate and tax prediction market contracts, including those on sports events under Illinois gambling laws.