TLDR
- Utah is set to sign HB243, a law classifying “proposition betting” as gambling, directly targeting prediction market platforms like Kalshi and Polymarket
- Governor Spencer Cox plans to sign the bill, citing concerns about young people’s access to digital betting
- Kalshi has already sued Utah in federal court, arguing the CFTC holds exclusive authority over its products
- The CFTC under Trump supports Kalshi’s position, setting up a federal vs. state legal clash
- Bipartisan federal legislation has been introduced to ban bets on war, assassinations, and elections
Utah is moving to block prediction market platforms Kalshi and Polymarket from operating in the state, pushing the country’s growing fight over online betting into new legal territory.
Utah’s bill, HB243, passed both chambers of the state legislature and is headed to Governor Spencer Cox’s desk. Cox has said he will sign it. The law classifies “proposition betting” — wagers on specific in-game events like a player’s stats — as gambling under state law.
Prediction market companies argue their products are financial derivatives, not bets. Kalshi and Polymarket let users buy and sell contracts tied to the outcome of events, priced between one cent and 99 cents based on how likely participants think that outcome is.
Utah has prohibited gambling since joining the Union in 1895. Along with Hawaii, it has the strictest gambling laws in the country. About half of the state’s 3.5 million residents are members of The Church of Jesus Christ of Latter-day Saints, which teaches that gambling is morally harmful.
“We are putting a casino in the pocket of every single American, and they are targeting especially young people,” Cox said.
The Legal Battle Lines
Kalshi sued Utah in federal court in late February, before the bill was even signed, asking a judge to block enforcement. The company argues the Commodity Futures Trading Commission has exclusive jurisdiction over its products under the Commodity Exchange Act.
The CFTC under the Trump administration has backed that position. CFTC Chairman Michael Selig recently said: “To those who seek to challenge our authority in this space, let me be clear, we will see you in court.”
Kalshi also filed a lawsuit against Iowa this week, citing the threat of enforcement action. An Ohio federal judge recently rejected Kalshi’s request to block state gambling laws from applying to its sports contracts. Other courts in Nevada and Massachusetts have ruled in favor of states, while judges in New Jersey and Tennessee sided with Kalshi.
Kalshi reported over $1 billion in trading volume on the Super Bowl alone. Both companies are valued at around $20 billion each following their most recent fundraising rounds.
Federal Lawmakers Enter the Debate
Republican Rep. Blake Moore of Utah and Democratic Rep. Salud Carbajal of California introduced bipartisan legislation this week to tighten regulation of prediction markets.
The bill would ban bets on war, assassinations, terrorist attacks, and election outcomes. It would also allow states to ban sports-related contracts.
“We, as a society, should not be taking bets on whether we are going to invade Cuba,” Moore said.
Democratic senators have said they will introduce separate legislation to ban wagers on violence. Senator Chris Murphy of Connecticut called the current situation “insane.”
President Trump’s eldest son serves as an adviser to both Kalshi and Polymarket and is an investor in Polymarket. Trump’s social media platform Truth Social is also launching its own cryptocurrency-based prediction market called Truth Predict.
The Utah governor’s opposition to prediction markets marks his first public clash with Trump since the two reconciled after Cox did not vote for Trump in 2016 or 2020.
