* Crain’s…

Illinois prosecutors have agreed not to bring enforcement actions against Kalshi for violating a new law that taxes contracts traded on prediction markets until the case challenging the recently enacted statute can be settled in court.

Kalshi sued Illinois over the law, set to take effect July 1, which amends the Illinois Sports Wagering Act to add a 1.75% to 3.5% transaction tax on wagers made on prediction markets. It also requires operators to obtain a license from the state.

Kalshi withdrew its request to the court for a temporary restraining order but is still seeking a preliminary injunction to block implementation of the law.

“Kalshi is fundamentally different from state-regulated sportsbooks and casinos,” the company said. “Courts have already recognized our status as a federally regulated exchange. Illinois is wasting its time and taxpayers’ dollars.”

No revenue from the tax was calculated in the budget, so this is not a hit. The state knew this suit was highly likely.

* Meanwhile, in Michigan…

Michigan Attorney General Dana Nessel secured a temporary restraining order halting KalshiEx, LLC (Kalshi) from offering online sports wagers to Michigan residents.

Attorney General Nessel filed a lawsuit against Kalshi in March, alleging the derivatives exchange and prediction market company violated Michigan’s Lawful Sports Betting Act (LSBA). […]

After the lawsuit was filed in state court, Kalshi attempted to move the case to the United States District Court for the Western District of Michigan. Attorney General Nessel then filed the Motion to Remand, which was granted, sending the lawsuit back to the Ingham County Circuit Court.

* From the Michigan state judge’s order…

The judge said ​she would fine Kalshi $120,000 for each day it does not comply with the ​geolocation requirements her order imposes. […]

“Michigan and ​its most vulnerable citizens are suffering and will continue to suffer immediate and irreparable harm absent relief from being exploited by Kalshi’s sports betting operation masquerading as an investment opportunity,” the judge’s order ​said.

She barred the New York-based company from offering sports-events contracts to anyone located in ​Michigan and ordered Kalshi to utilize a third-party geolocation service provider licensed by the state’s gaming control ‌board ⁠in order to comply with her restrictions.

Kalshi spokesperson Elisabeth Diana in a statement said the company plans to fight the decision in court. The company has argued it is subject to the exclusive jurisdiction of the U.S. Commodity Futures Trading Commission.