Utah Attorney General sues prediction market platform Kalshi over alleged illegal betting
Utah sues Kalshi over alleged illegal betting
Utah Attorney General Derek Brown filed a civil lawsuit on Tuesday against Kalshi, its affiliates and two Susquehanna trading companies, accusing the prediction‑market platform of offering illegal betting contracts in the state since 2024.
The lawsuit asks a court to order the companies to return between $30 million and $60 million in profits earned from Utah users and to stop all sports, election, politics, culture and mention bets in the state.
Key numbers
- More than 32,000 Utah residents allegedly used Kalshi’s platform.
- Profits at issue are estimated at $30 million‑$60 million.
- The case follows a February 2024 state law that classifies prediction‑market betting as gambling.
Attorney General’s claims
Brown said the operation “causes a significant and substantial ongoing harm” to a large number of Utahns. He contends that Kalshi violated state gambling law by allowing residents to trade contracts on sports, elections, politics, culture and other events.
Kalshi’s response
Kalshi spokesperson Jacki McGavick told Cointelegraph that the platform is “a federally regulated financial exchange, like the stock market.” She said Kalshi operates under CFTC oversight and that no single state should be able to veto its services. The company noted that the Utah court action does not affect its ongoing federal litigation.
Legal backdrop across the United States
Utah’s lawsuit adds to a growing wave of state actions against prediction‑market platforms such as Kalshi and Polymarket. Arizona is pursuing criminal charges against Kalshi, while Michigan, Ohio, Kentucky, Nevada, Massachusetts, Wisconsin and New York have filed civil suits.
The U.S. Supreme Court is also considering whether to hear a related case from New Jersey that could decide if state gambling laws or the CFTC have exclusive jurisdiction over prediction‑market contracts.
What is confirmed
- Utah AG Derek Brown filed a civil suit against Kalshi and related companies on Oct 20 2026.
- The suit seeks the return of $30‑$60 million in profits and an injunction on certain bet types.
- Kalshi publicly stated it is regulated by the CFTC and that the state case does not affect its federal case.
Remaining uncertainties
The lawsuit’s outcome, including whether the court will order the return of profits or bar the specific contract types, has not been decided. It is also unclear how the pending Supreme Court decision might influence Utah’s case.
Why it matters
If the court sides with Utah, the ruling could limit how prediction‑market platforms operate in states that classify such contracts as gambling. It could also shape the balance of power between state gambling regulators and the federal Commodity Futures Trading Commission, which oversees derivatives markets.
Potential next steps
Kalshi is expected to continue its federal litigation challenging the state law. The Utah case will proceed through the courts, and any decision may be appealed. The Supreme Court’s consideration of the New Jersey case could provide further guidance.
Sources
Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.
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