The letters alleged the businesses were engaged in unapproved sports wagering, and therefore illegal gambling, and ordered them to cease the activities or face financial and civil penalties.

This means the Prairie State has become now the fifth in the US to send letters challenging the burgeoning sports contract vertical after Nevada, New Jersey, Ohio and Connecticut.

The Kalshi letter, addressed to CEO Tarek Mansour and chief regulatory officer Eliezer Mishory said: “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. Accordingly, Kalshi and anyone affiliated with its operations are directed to cease and desist this illegal activity. Failure to comply may subject Kalshi to civil or criminal penalties.”

Top Kalshi lawyer exits for DOGE role

Following the issuing of the letter, Bloombergreported sources familiar with the matter said Mishory, who is Kalshi’s top lawyer, had exited the prediction market to lead the DOGE team at the US Securities and Exchange Commission.

This comes amid a series of legal battles for the prediction market platform, which is now simultaneously suing the Nevada Gaming Control Board, the New Jersey Department of Gaming Enforcement and the Commodity Futures Trading Commission (CFTC).

These cases could set the stage for the most significant gaming legal test since the 2018 PASPA repeal, by confirming or denying the legality of sports events contracts in the US.

These, which are regulated federally by the CFTC, faced a shaky legal start amid a clampdown by the sceptical Biden Administration, which had also opposed political event contracts.

However, the Trump White House is widely considered to be much more friendly to the new derivative products, and has tapped a former Kalshi board member to lead the CFTC.

This comes as the president’s son, Donald Trump Jr., is also paid by Kalshi as a strategic advisor to the business.