TLDR
- Kalshi, a New York-based prediction market, has sued the state of Utah to block enforcement of proposed anti-gambling laws against its platform.
- Utah Governor Spencer Cox and Attorney General Derek Brown have publicly stated they intend to stop Kalshi from operating in the state.
- Kalshi argues its contracts are regulated by the federal Commodity Futures Trading Commission (CFTC), which has said it holds exclusive jurisdiction over prediction markets.
- Utah’s HB243 bill, which would classify proposition betting as gambling, has passed the House and a Senate committee and is awaiting a full Senate vote.
- Kalshi says its services fall under a “lawful business” carveout in Utah’s anti-gambling laws.
Prediction market platform Kalshi has filed a lawsuit against the state of Utah, asking a federal court to stop the state from enforcing laws that would shut down its operations there.
Kalshi is based in New York and lets users place contracts on the outcome of future events. If a user’s prediction is correct, they receive a payout. The platform operates under federal oversight from the Commodity Futures Trading Commission (CFTC).
The lawsuit was filed in U.S. District Court. Kalshi says Utah officials are preparing to take enforcement action against the company under the state’s existing anti-gambling laws.
Utah Governor Spencer Cox posted on X that prediction markets are “gambling — pure and simple.” He said they are “destroying the lives of families and countless Americans, especially young men.”
Cox also said Utah is “ready to defend our laws in court and protect Utahns from companies that drive addiction, isolation and serious financial harm.”
Attorney General Derek Brown wrote an op-ed in the Deseret News calling prediction markets “the newest iteration of gambling.” He argued there is no real difference between placing a bet and trading a futures contract on a sporting event.
“What is the real risk to hedge when you are simply predicting whether LeBron James will score more or less than another player?” Brown wrote. “It’s simply a bet, dressed up in different clothing.”
Kalshi disagrees. The company says its contracts are legal under a carveout in Utah’s anti-gambling laws that permits “lawful business.”
Federal vs. State Authority
The case comes after CFTC Chairman Mike Selig said last week that his agency would “defend its exclusive jurisdiction” over prediction markets. Kalshi is leaning on that statement as a key part of its legal argument.
The company says its lawyers made multiple attempts to reach Attorney General Brown before filing the suit. Those attempts, it says, were ignored.
Utah Bill Moving Forward
Utah’s legislature is also pushing forward with HB243, a bill that would formally define proposition betting as gambling under state law. Proposition bets are wagers placed on specific in-game events or individual player performance.
HB243 has already passed the full House and a Senate committee. It is now waiting for a vote on the Senate floor.
Senate President Stuart Adams said he is “standing with the governor on this one” when asked about Kalshi’s lawsuit this week.
The bill and the lawsuit are now on parallel tracks, with the courts and the legislature both set to weigh in on whether Utah can regulate prediction markets operating under federal oversight.
