TLDR
- Utah Attorney General Derek Brown sued Kalshi, its affiliates and two Susquehanna trading companies over alleged illegal betting.
- The state wants a court to make the companies return $30 million to $60 million in profits.
- Brown says Kalshi offered its services to more than 32,000 Utah users since 2024.
- Kalshi lost a federal preemption ruling in August and an appeal for an injunction in September.
- Kalshi says it is a federally regulated exchange and that no single state should have a veto over it.
Utah Attorney General Derek Brown has filed a lawsuit against prediction market platform Kalshi. The suit also names Kalshi’s affiliates and two Susquehanna trading companies.
Brown alleges that Kalshi has been facilitating illegal betting in Utah since 2024. He announced the case at a press briefing on Tuesday, Oct. 20.
Utah officials have asked a court to make the companies return between $30 million and $60 million. Brown said these are profits made through event contracts that broke state law.
What Utah Is Asking For
According to Brown, Kalshi offered its services to more than 32,000 users in Utah. He said those users suffered large losses as a result.
Brown compared the company to a “public nuisance.” He said the operation is causing ongoing harm to many people in the state.
“We are asking the court to stop sports, elections, politics, culture and mention bets here in Utah,” Brown said.
The legal fight between Kalshi and Utah began earlier this year. Kalshi sued the state in February after lawmakers passed a bill treating prediction market bets as gambling under state law.
In August, a judge ruled in favor of Utah officials. The judge found that federal laws under the US Commodity Futures Trading Commission (CFTC) do not override state gambling laws.
In September, an appeals court denied Kalshi’s request for an injunction. That decision blocked the platform from operating in Utah while its appeal moves forward.
Legal Fights Across the US
Utah’s case is one of many filed by state authorities against prediction market platforms such as Kalshi and Polymarket. Many of these cases involve sports betting.
Arizona remains the only state pursuing criminal charges against Kalshi. Other states have filed civil suits against one or more prediction market companies.
Those states include Michigan, Ohio, Kentucky, Nevada, Massachusetts, Wisconsin and New York.
The US Supreme Court is now considering whether to hear New Jersey’s case against Kalshi over alleged illegal sports bets. The NFL has backed New Jersey authorities in that petition.
If the court accepts the case, it could decide whether prediction markets fall under state control or the CFTC. The CFTC claims “exclusive jurisdiction” over the platforms’ event contracts.
Kalshi pushed back on the Utah lawsuit in a statement. “Kalshi is a federally regulated financial exchange, like the stock market,” spokesperson Jacki McGavick said. “Our customers trade with each other and set the prices.”
McGavick said the company answers to federal law as a national derivatives market overseen by the CFTC. “No single state should have a veto over it,” she said. “This latest state court action does not affect our ongoing federal litigation.”
