CFTC v. Illinois: Allegations, Court Orders and Status

What this case is about

CFTC v. Illinois is a federal lawsuit, United States and CFTC v. State of Illinois, No. 1:26-cv-03659, in the U.S. District Court for the Northern District of Illinois. It was filed on 2 April 2026 and assigned to Judge Martha M. Pacold.

The United States and the Commodity Futures Trading Commission (CFTC) sued the State of Illinois, Governor JB Pritzker, Attorney General Kwame Raoul and the Illinois Gaming Board. The suit followed the Gaming Board's cease-and-desist letters to Kalshi, Crypto.com and Polymarket. It is one of the Prediction Market Lawsuits over federal authority against state gambling law.

The claims are Supremacy Clause preemption under the Commodity Exchange Act (7 U.S.C. 2(a)(1)(A)) and declaratory and injunctive relief.

Who is covered

No class exists and players are not parties. The injunction protects sports event contracts on CFTC-regulated exchanges and clearing firms from enforcement of the listed Illinois provisions, and it binds the State, the Governor, the Attorney General and the Gaming Board.

The court heard the case together with Coinbase v. Raoul and Kalshi v. Raoul. For the state-level picture, see Court Status and Every Gambling Lawsuit in Illinois.

Is there a payout?

No payout exists in this case. The plaintiffs are federal agencies seeking declaratory and injunctive relief, not money, and there is no class, no settlement fund and no claim deadline.

The relief is an order about whether Illinois may enforce its laws, not compensation for players.

What the court decided

On 2 October 2026 Judge Pacold issued a memorandum opinion and order (Dkt. 99). It granted in part and continued in part the motions of Coinbase, the United States and the intervenors, and Kalshi. The order found that the contracts are likely swaps and that some Illinois law is likely preempted.

On 30 October 2026 the court entered a preliminary injunction (Dkt. 64 in 1:26-cv-07363, covering all three cases). It bars the defendants from enforcing 230 ILCS 45/art. 25, 720 ILCS 5/28-1(a), 230 ILCS 10/18(a)(1) and 11 Ill.

Admin. Code 1900.1210(a) against swaps, including sports event contracts, on CFTC-regulated exchanges and clearing firms. That covers licensing requirements, associated fees, taxes and criminal provisions. The SB 3019 fee is left open.

As of 14 November 2026 the case is on appeal. The state noticed appeals on 30 October 2026 (Coinbase) and 2 November 2026 (Kalshi), and the case is No. 26-3266 in the Seventh Circuit. No hearing date is confirmed in the court record.

Why it matters

Judge Pacold ruled for the CFTC and the operators at the injunction stage, and the state appealed. The order is in force while the appeal is pending, so legal status in Illinois is a matter of this order and its date, not a flat "legal" or "illegal."

How Is Kalshi Legal? explains the swaps question and the circuit split behind the ruling.

Questions people ask

Does the Illinois injunction make Kalshi legal in Illinois?

It is a court order of 30 October 2026 that bars enforcement of listed Illinois provisions against sports event contracts on CFTC-regulated exchanges. It is on appeal, so status follows the order, not a flat word.

Did the court say the contracts are swaps?

In the 2 October 2026 opinion, the court found the contracts likely swaps and some Illinois law likely preempted. A likelihood finding at the injunction stage is not a final judgment.

Can players get money from this case?

No. No payout exists in this case, because the plaintiffs are federal agencies seeking declaratory and injunctive relief.

Related cases

• KalshiEX LLC v. Raoul (heard with Coinbase Financial Markets v. Raoul and United States v. Illinois): Kalshi's own suit, status appealed.
• Coinbase Financial Markets, Inc. v. Raoul: Coinbase's suit, status appealed.