Kalshi is taking the state of Illinois to court over its new law putting in place a regulatory regime for prediction markets, which the platform says puts it at odds with the federal government.

The company filed a complaint this week in the U.S. District Court for the Northern District of Illinois against Illinois Attorney General Kwame Raoul, Governor JB Pritzker, and other state officials. The platform says it will be "irreparably harmed" when the new law takes effect on July 1.

Last week, Pritzker signed into law broad budget and revenue legislation, SB3019, that does a number of things, including, controversially, enacting a 0.2% charge on the value of digital asset transactions or services provided to Illinois customers as well as requiring prediction market platforms to get a state license. In its complaint, Kalshi says those requirements are preempted by federal law because its event contracts are regulated at the federal level.

The dispute is the latest chapter in an ongoing battle between federal and state regulators over who has authority over prediction markets, particularly those tied to sporting events. The Commodity Futures Trading Commission, under lone commissioner Chair Michael Selig, has argued that his agency has "exclusive jurisdiction" over prediction markets and that states are overreaching. Meanwhile, states say that platforms are violating local gaming and gambling laws.

"If Kalshi complies with the new state law by ceasing to offer its sports event contracts in Illinois, that would put Kalshi in violation of the CFTC’s uniformity requirements, harm Kalshi’s commercial interests, and require the company to implement complex and expensive technological solutions to limit access in Illinois—incurring costs that would not be recoverable when Kalshi ultimately prevails in the action," Kalshi said in the complaint.

So far, the CFTC has sued nine states in an effort to assert its jurisdiction, including Illinois. In response to CFTC suing the state in April, a spokesperson for Pritzker told The Block that the state would continue to fight to protect its consumers.

Kalshi argues in the complaint that the CFTC has jurisdiction over prediction markets, not Illinois. The platform says the new law violates the Commodity Exchange Act and that it is already registered as a designated contract market with the CFTC.

"It [SB3019] expressly violates the CEA’s 'exclusive jurisdiction' provision by asserting concurrent state jurisdiction over sports events contracts traded on federally regulated DCMs; it intrudes on the field of exchange-traded derivatives that Congress has reserved entirely for the federal government; and it forces regulated entities to choose between violating federal or state law," the platform said in the complaint.

Kalshi asked the court to grant it a temporary restraining order, a preliminary injunction, and a permanent injunction to prevent Illinois from enforcing the law.

Offices for Pritzker and Raoul did not immediately respond to a request for comment about Kalshi's complaint.