Illinois Regulator Warns Operators: Prediction Markets Are Illegal Gambling
The Illinois Gaming Board (IGB) issued a memorandum on October 23, to all licensees and stakeholders, clarifying its position on prediction markets. The IGB stated that offering any form of prediction market, including so-called “sports events contracts,” constitutes illegal gambling activity under state law. The directive, sent by IGB Administrator Marcus D. Fruchter, confirms the regulator’s firm stance against these unauthorized activities.
Prediction Markets Deemed Illegal Gambling
The IGB’s core message is that no general right to profit from gambling exists in Illinois. Gaming is lawful only as specifically allowed by state acts like the Illinois Gambling Act or the Sports Wagering Act. The Memorandum states that any “Prediction markets’ constitute gambling activity under Illinois law.”
The regulator warned that any person or entity facilitating or participating in such activity within Illinois without an IGB license is engaging in illegal gambling. The IGB defines sports wagering broadly.
This includes single-game bets, parlays, moneyline, exchange wagering, and proposition bets. The Board reiterated that no entity can conduct any sports wagering operation in the state without specific IGB licensure.
Illegal Activity Threatens License Suitability
The Memorandum issued a strong caution regarding the effect of illegal activity on a party’s suitability for an Illinois license. Engaging in or facilitating any illegal gambling activity can negatively impact an operator’s license application or retention.
The IGB extended this warning beyond state lines. The Board stated that if a party violates gaming laws or rules in another state or under a tribal government, such conduct can also affect its suitability for an Illinois license. Furthermore, an operator’s fitness for licensure may be harmed by partnering with any entity engaged in gaming law violations in other jurisdictions.
IGB licensees were reminded of their constant duty to comply with all applicable laws and regulations. They must operate in a way that does not threaten public safety or the integrity of the Illinois gaming industry.
The Board emphasized that all licensees must maintain suitability at all times. Violations of these rules could lead to disciplinary sanctions, including the ultimate penalty of license revocation.
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