Is Robinhood legal in Illinois?

The Board's letter is one page, sent by email on April 1, 2025 to Robinhood's chief executive at its Menlo Park, California address and signed by the Board's administrator, Marcus D. Fruchter. Its subject line reads "Suspected Illegal Sports Wagering by Robinhood." It names the company only as "Robinhood", with no corporate suffix; Robinhood's help center says its event contracts are offered by Robinhood Derivatives, LLC, a futures commission merchant registered with the CFTC.

The Board's case rests on two Illinois statutes. Under the Sports Wagering Act, nobody may run a sports wagering operation without a Board license, and the Act's definition lists "exchange wagering" among the forms covered. The Criminal Code makes it unlawful to run an Internet site that lets a person wager on "any sport, game, contest, political nomination, appointment, or election" without a Board license, and the letter cites that clause alongside the Board's own rule.

The letter then applies those rules to Robinhood: the Board "has neither licensed nor authorized" it, so in the Board's view its activity is illegal gambling. Robinhood "and anyone affiliated with its operations" are directed to cease and desist, and the letter says failure to comply "may subject Robinhood to civil or criminal penalties." Copies went to the Illinois State Police's gaming command and the attorney general's office.

We found nothing further. The Board's cease-and-desist page, read October 29, 2026, still lists "Robinhood (04/01/2025)", beside letters dated the same day to Kalshi and Crypto.com and one to Polymarket dated January 27, 2026. The page shows no withdrawal or follow-up. Robinhood is not on the Board's list of authorized operating sportsbooks, read the same day, which is consistent with the letter's statement that it holds no license.

The letter sets no deadline and names no hearing, so there is no date by which the Board said it would act. We could not search the federal or Illinois court dockets for this check, and the Board's table of disciplinary complaints did not load for us, so a filing could exist that we have not seen. What we can say is that no document we read records the state suing Robinhood or Robinhood suing the state.

Not by Illinois, in anything we found, but a private company has sued it there, according to Robinhood's own quarterly report for the quarter ended September 30, 2026, filed October 28. The report says that in June 2025 Illinois Gambling Recovery LLC sued Robinhood Markets and Robinhood Derivatives in Illinois state court, one of six suits by similarly named companies in six states (p.52). Each claims under a state "Statute of Anne", the report's term for laws that "permit recovery of gambling losses under certain conditions," and seeks damages for losses on event contracts.

Robinhood says it moved the case to federal court, the Illinois federal court sent it back to state court, and the plaintiff voluntarily dismissed Robinhood Derivatives (p.53). The report does not say whether Robinhood Markets remains a defendant. We have not read the complaint, the court's orders or the docket, so we don't give the court or case number, and a claim in a complaint is not a finding.

Robinhood has not answered the Board in any public document we found. Its overview page calls an event contract "a financial derivative" and says Robinhood's contracts "are not bets." Its quarterly report says exchanges and futures commission merchants, Robinhood Derivatives among them, have received cease-and-desist letters from states "asserting that offering federally regulated event contracts violates state wagering and gaming laws" (p.105).

Robinhood argues its legal position in the Nevada case it brought against that state. Its Supreme Court petition, No. 26-338, filed September 10, 2026, asks "whether the Commodity Exchange Act preempts the application of state gaming laws to sports-related event contracts traded on federally regulated contract markets." The docket shows the time to respond extended to November 13, 2026. That case is followed on Robinhood in Nevada.

No. Robinhood is not a party to the three suits against Illinois officials decided together in Chicago on October 2, 2026, which were brought by Coinbase, the United States with the CFTC, and Kalshi. Robinhood comes up only as context. Coinbase's complaint describes Robinhood as "similarly situated to Coinbase as an FCM that offers access to Kalshi's event contracts through a partnership with Kalshi" (p.4, ¶ 8), and says Kalshi, Robinhood and Crypto.com received "identical" letters (p.22, ¶ 58). Those are Coinbase's characterizations.

Robinhood's help center lists KalshiEX LLC as one of four exchanges its event contracts come through, so the Chicago case concerns some of the same contracts. What the court found, and the injunction terms it asked the parties to propose, are on Kalshi in Illinois and Coinbase in Illinois. Any appeal would go to the Seventh Circuit, which covers Illinois.

Robinhood's own filing says it likely would add to its costs. Its quarterly report describes an Illinois tax "on state-licensed prediction market operators equal to 1.75% of the value of the first five million contracts traded annually by individuals in Illinois and 3.5% for such contracts in excess of that threshold," and says that if the law "survives pending legal challenges, it is likely to increase our cost of doing business in Illinois" (p.108). It notes a competitor's suit calling the tax preempted, and says Robinhood is "not party to any litigation or proceeding relating to these matters" (p.55).

Those are Robinhood's descriptions, and the statute's own text, Article 130 of Public Act 104-0468, is covered on Kalshi in Illinois. We found no Board action assessing the tax against Robinhood, and the report does not say whether Robinhood has paid it. The tax falls on an operator, not on what a customer makes.

We could not determine it from a primary document. Robinhood's restrictions page, read October 29, 2026, says "Maryland residents can't trade event contracts" and that Nevada residents cannot open new sports contracts. The overview page, read the same day, names Maryland, Nevada and Michigan, and adds that "Additional state restrictions may apply." Neither page names Illinois.

The Board's letter speaks only to offering sports wagering. It says nothing about cash balances, deposits, withdrawals or open contracts, and no court order we found addresses them for Illinois customers. Robinhood's status in other states is on the Robinhood legal page.

The Board's letter is about who may offer sports wagering in Illinois and the exchange wager tax is an operator's, so neither decides how a customer's gains and losses are reported, and the IRS has issued no guidance on event contracts. Robinhood event contracts taxes shows a Robinhood year under the three ways we most often see people file.