Illinois regulators say prediction markets are illegal gambling, but bettors — and the Trump family — love them

Prediction market platforms like Kalshi and Polymarket rake in millions from wagers on sports and current events but pay nothing in state betting taxes and ignore regulations that govern online sportsbooks.

Mar. 13, 2026 at 1:07pm

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This story examines the rise of prediction markets, which allow users to bet on the outcomes of future events, and the legal battle between these markets and state regulators in Illinois who view them as illegal gambling. While the Trump administration has championed prediction markets, states like Illinois are struggling to rein them in as they operate outside the regulations that govern online sportsbooks. The story profiles a University of Chicago student who has embraced prediction markets and started a campus club to promote them, despite concerns about their addictive nature.

Why it matters

Prediction markets have exploded in popularity in recent years, with platforms like Kalshi and Polymarket allowing users to bet on everything from elections to the likelihood of a nuclear detonation. However, these markets operate in a legal gray area, as they are not subject to the same regulations that govern traditional online sportsbooks. This has led to a clash with state regulators in Illinois, who view prediction markets as illegal gambling that deprives the state of tax revenue and fails to protect vulnerable residents.

The details

Prediction markets have existed for decades, but have gained mainstream attention in the past year thanks to aggressive marketing from companies like Kalshi and Polymarket. These platforms allow users to bet on the outcomes of future events, from sports to politics to current events. While existing online sportsbooks like FanDuel have launched their own prediction market platforms, state regulators in Illinois view these markets as illegal gambling that skirt regulations. The state has sent cease-and-desist letters to several prediction market operators, and is now facing lawsuits from companies like Coinbase and Kalshi who argue the state is overstepping its authority. The legal battle is playing out as prediction markets have become embraced by figures like the Trump family, who have invested in or advised these platforms.

  • In 2024, Oliver Wilson, then a high school senior, began using prediction markets like Polymarket to bet on the presidential election.
  • Last summer, Wilson interned at Polymarket's New York City headquarters and later pitched the company's founder to seed a prediction market club on his college campus.
  • In spring 2025, the Illinois Gaming Board sent cease-and-desist letters to prediction market operators like Kalshi, Robinhood and Crypto.com.
  • Earlier this year, the Illinois Gaming Board sent a letter to Polymarket, which does not yet offer a general platform in the United States.
  • Last month, the Commodity Futures Trading Commission announced that it would no longer 'sit idly by' as states try to regulate prediction markets.

The players

Oliver Wilson

A 19-year-old University of Chicago freshman who has become an avid user of prediction markets and has started a campus club to promote them.

Shayne Coplan

The founder of Polymarket, a cryptocurrency-based prediction market platform, who agreed to provide $20,000 in seed funding for Wilson's campus club.

Donald Trump Jr.

The son of former President Donald Trump, who has invested in Polymarket and serves as a 'strategic advisor' to a competitor, Kalshi.

Mike Selig

The chairman of the Commodity Futures Trading Commission, who has vowed to fight state efforts to regulate prediction markets.

Michael Hastings

An Illinois state senator who has introduced legislation to require prediction market operators to pay a $1 million fee and empower the state to collect a tax on bets made by in-state users.

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What they’re saying

“I was fascinated by the fact that these markets were able to more accurately, than any other poll, predict by what margin and where Trump would win.”

— Oliver Wilson, University of Chicago freshman

“It's clear that Americans like the product and want to participate.”

— Mike Selig, CFTC Chairman

“You have to have some sort of system of morality in place in a society otherwise, or your laws are just going to keep pushing things to the lowest common denominator and the lowest possible place.”

— Karl Lockhart, DePaul University assistant law professor

“People can argue about whether it meets a legal definition, but from a practical perspective, and especially from an addiction perspective, it is categorically a type of gambling.”

— Keith Whyte, Former executive director of the National Council for Problem Gambling

“I think there's a difference between just a risk taker and a gambler, and I think as long as those risks are exclusively calculated, then I am happy to let them in.”

— Oliver Wilson, University of Chicago freshman

What’s next

The judge in the case will decide on Tuesday whether or not to allow Kalshi to continue operating in Massachusetts while the lawsuit proceeds.

The takeaway

The rise of prediction markets has sparked a legal battle between state regulators, who view them as illegal gambling, and the companies operating these platforms, who argue they are financial tools. This clash highlights the challenges of regulating emerging technologies and the need to balance innovation with consumer protection.