Illinois Representative Introduces Bill to Eliminate Prediction Market Tax on Exchange Wagers
TL;DR — Rep. Travis Weaver introduced HB 5811 to repeal Illinois’s new tax and licensing rules for prediction market exchange wagers before they generate revenue. The CFTC and Kalshi have filed suits claiming federal preemption. Action could come in the November veto session or the 2027 legislative session.
SCCG Take — Acting before revenue dependency forms preserves options for regulatory rollback. Operators should track whether federal preemption arguments limit state-level taxation of CFTC-registered contracts.
Republican state Rep. Travis Weaver has introduced House Bill 5811 to strike the definition of exchange wager from the Sports Wagering Act and repeal the transaction tax imposed on prediction market contracts.
The measure follows Governor JB Pritzker’s approval of Senate Bill 3019, the fiscal-year 2027 budget that defined certain sports-event contracts as exchange wagers and subjected them to taxation. Weaver told CDC Gaming the filing is intended to build momentum ahead of legislative action.
Bill Provisions and Introduction Timing
HB 5811 would repeal the tiered transaction tax of 1.75% on the first five million exchange wagers in a fiscal year and 3.5% on each thereafter. It would also eliminate the requirement for prediction markets to obtain state licenses with an initial fee of $15 million valid for four years and $1 million subsequent renewals.
Weaver filed the bill now as the Illinois legislature prepares for a six-day veto session in November and December. He said it would likely receive consideration when lawmakers return on January 13 for the 2027 legislative session, though he hopes for action during the veto session. “They are in effect and not generating any revenue,” said Weaver. “If it’s legal, we have to let it be legal.”
The representative cited a core objection to the budget approach: no revenue was projected from the new taxes, yet funds were allocated for the attorney general to defend them. He noted that once such a tax begins producing revenue it becomes far more difficult to repeal.
The bill leaves untouched Illinois’s existing sports betting tax structure of graduated rates from 20% to 40% on adjusted sports wagering receipts together with per-wager fees of $0.25 for the first 20 million annually rising to $0.50 thereafter.
Current Legal Challenges
The CFTC sued Illinois in April, prior to final approval of the exchange wager tax, asserting that regulation of sports event contracts falls under federal authority. After Pritzker signed the budget bill the CFTC amended its complaint to argue that both the licensing and tax provisions are preempted by the Commodity Exchange Act. Kalshi filed suit in June on parallel grounds, challenging the state license mandate as well.
Illinois officials have defended the framework as consumer protection against illegal gambling. Weaver’s legislation arrives while those cases remain pending and before any tax revenue materializes.
Reporting: CDC Gaming
Generated by SCCG’s automated editorial system from published source reporting. SCCG Management holds editorial responsibility.
Weaver's pre-revenue repeal push is smart timing — once the state sees dollars, regulatory rollback becomes nearly impossible.
We've seen this pattern in 30-plus years: once tax revenue flows, legislatures won't let go. Illinois imposed a license fee and tiered tax on prediction markets before a single dollar arrived. The CFTC and Kalshi are already suing on federal preemption grounds. This is the narrow window to reverse course before fiscal dependency locks it in.
- HB 5811 repeals 1.75%–3.5% transaction tax and $15M licensing fee on prediction markets
- CFTC and Kalshi filed federal preemption suits before tax generated revenue
- Veto session or 2027 legislative session likely window for action
SCCG angle: SCCG has guided clients through 545 partnerships across every regulated market. When state tax structures collide with federal authority, we connect operators to the regulatory, legal, and lobbying networks that shape outcomes — before windows like this one close. Timing is everything.
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