Utah sues Kalshi and Susquehanna firms over alleged illegal gambling
Utah takes Kalshi to court over betting claims
Utah sued Kalshi and two Susquehanna trading firms on Tuesday. The state says the companies are running an illegal gambling business in Utah.
The lawsuit was filed by Attorney General Derek Brown. It names five Kalshi companies, plus Susquehanna International Group and Susquehanna Government Products.
Utah wants the companies to return money it says they made illegally. It is also asking for compensation for the state and its residents, and for damages.
The main numbers in the complaint
- Utah estimates Kalshi collected between $30.6 million and $61.2 million in fees from Utah-based accounts through Oct. 19.
- The state notes the real figure could be much higher or much lower.
- Utah wants to block sports, election, politics, culture, and "mentions" bets.
- The state also wants more precise location checks to enforce restrictions.
What the lawsuit alleges
The complaint argues that labeling bets as "event contracts" does not change what Kalshi offers. It compares KalshiEx, which runs the platform, to "the manager of a back-alley gambling den" that hosts bets and takes a cut.
Utah is also targeting the companies on the other side of users' bets. It alleges that Kalshi Trading and the Susquehanna firms act like a betting house by taking bets against users and collecting money when those users lose.
Sports and gaming attorney Daniel Wallach described the case as the first state attorney general enforcement action aimed at prediction-market market makers. A prediction market is a platform where people bet on the outcome of future events.
Comments from Utah's attorney general
At a press conference, Brown criticized how prediction markets appeal to users, especially young men.
"To those of you who are ensnared in this addiction, please stop," he said.
"These companies, they're not your friends. They're not helping you invest. They're not providing you with insight or opportunity," he said. "Frankly, they are engineered to do one thing and one thing alone, and that's empty your wallet."
Brown said Utah was focused on Kalshi for now, but suggested other platforms could be targeted later. "Ultimately, this is part of a larger investigation," he said.
Earlier cases against Kalshi
The Utah case follows lawsuits filed in August by Connecticut and Baltimore over alleged unlicensed sports betting. Baltimore also sued Kalshi's distribution partners Coinbase, Robinhood and Webull.
In September, a federal appeals court ruled that Ohio and Tennessee could enforce their sports betting laws against Kalshi. The court rejected Kalshi's argument that federal oversight protected it from state laws. Kalshi disagreed with the ruling and said it expected it to be overturned.
What is confirmed
Utah filed the lawsuit Tuesday against five Kalshi companies, Susquehanna International Group and Susquehanna Government Products. The state's fee estimate covers Utah-based accounts through Oct. 19. The requested blocks cover sports, election, politics, culture and "mentions" bets.
The August lawsuits from Connecticut and Baltimore, and the September appeals court ruling involving Ohio and Tennessee, are also reported as past events.
What is still unclear
Utah's fee estimate is described as an estimate, and the state itself says the actual amount could be much higher or lower. The outcome of the Utah case is not known. Kalshi's expected appeal of the September ruling has not been decided.
Brown said other platforms could potentially be targeted, but he did not name any.
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.