Kalshi suffers another blow as Illinois issues cease-and-desist letter

Prediction market Kalshi continues to be hit by cease-and-desist letters, with the Illinois Gaming Board (IGB), the latest state regulator, demanding an end to operations within the state.

This follows similar action taken by regulators in both New Jersey and Nevada, leading to Kalshi filing lawsuits against both states.

With Kalshi already engaged in a legal battle with gaming regulators in other states, this latest cease-and-desist letter has come at a bad time for the company.

Issued on April 1, the IGB letter alleges that Kalshi is “engaging in unlicensed sports wagering in violation of the Illinois Sports Wagering Act.”

The letter continued: “No person or entity may engage in a sports wagering operation or activity in Illinois unless licensed by the IGB.

“The IGB is aware that Kalshi is engaged in sports wagering activity in Illinois over the Internet and on mobile devices. The IGB has neither licensed nor authorised Kalshi to engage in sports wagering activity. Consequently, Kalshi’s activity constitutes illegal gambling in violation of Illinois law.”

Launched in July 2021, Kalshi is a platform for traders to place trades based on the outcome of future events.

Examples include sporting markets, political indicators and awards. Prices are then set according to the estimated probability of a given market, with a yes-no option provided to traders. Usually, trades are set up with a probability set from 0% to 100%.

Kalshi does have some history with esports, and the platform currently offers a market on the League of Legends World League of Legends World Championship.

The market favourites at present are T1, with a 28% probability, followed by Hanwha Life Esports (21%) and Gen.G (12%.)