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Court keeps Utah's prop betting ban in force during Kalshi appeal

Court keeps Utah's prop betting ban in force during Kalshi appeal

Rule Changes Salt Lake City, UT local

Utah keeps its prop betting ban in force while Kalshi appeals; a Sixth Circuit loss in Ohio and Tennessee deepens the circuit split

September 8th, 2026: Appeals court keeps ban in force

Overview

Updated Sep 29

Utah can keep enforcing its ban on sports-style prediction bets while Kalshi appeals. The 10th Circuit refused on September 8 to pause the state's prop betting law, and last week a Sixth Circuit panel rejected the same preemption argument in Ohio and Tennessee.

The fight turns on one question: are prediction markets gambling, which states can ban, or federally regulated commodities trading, which they can't? Kalshi says federal law overrides Utah's ban. A district judge sided with Utah on August 4, and the appeals court has kept the ban in force while it reviews that ruling.

Why it matters

If Utah's ban survives, states can block federally regulated prediction markets, and the circuit split is pushing that question toward the Supreme Court.

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Key Indicators

$400K
Winnings from a war-outcome bet tied to classified leaks
An Army soldier was charged in April with using classified raid details to win the bet on an online market.
23
Tribes and gaming associations backing Utah as amici
The groups supported the state's position that its gambling ban applies to Kalshi's contracts.
Denied
Appeals court stay of the ban pending appeal
The 10th Circuit refused on Sept. 8 to pause enforcement while Kalshi appeals.
1-2
Kalshi's record in circuit court decisions on sports contracts
Won in the Third Circuit against New Jersey; lost in the Ninth Circuit (Nevada) and the Sixth Circuit (Ohio and Tennessee). The 10th Circuit also refused to pause Utah's ban during its appeal.

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People Involved

Organizations Involved

Timeline

February 2026 September 2026

5 events Latest: September 8th, 2026 · 1 month ago
Tap a bar to jump to that date
  1. Utah clarifies prop betting is gambling

    Legislation

    Lawmakers pass and the governor signs a bill stating prop betting falls under the state's constitutional gambling ban.

Scenarios

1

10th Circuit upholds Utah's prop betting ban

Likely Resolves by End of 2027

Discussed by: Utah Attorney General's office and state officials, who won at the district court

The 10th Circuit affirms Judge Shelby's ruling that the Commodity Exchange Act preserves state gambling jurisdiction. Kalshi's prop bets stay blocked in Utah. The company could then petition the Supreme Court, though the Court takes few cases and would weigh whether a circuit split exists.

2

10th Circuit reverses, clearing Kalshi in Utah

Unlikely Resolves by End of 2027

Discussed by: Kalshi and prediction market advocates citing the 2024 D.C. ruling that allowed its election contracts

The 10th Circuit finds the Commodity Exchange Act preempts state gambling law or that Kalshi's contracts aren't gambling, letting the company resume prop bets in Utah. A decision against Utah could conflict with the D.C. Circuit's election-contracts ruling, drawing Supreme Court review.

3

Congress bans sports-style event contracts

Possible Resolves by Jan 3, 2027

Discussed by: Utah Sen. John Curtis and Rep. Blake Moore, who introduced bills in 2026

Congress passes a law barring CFTC-regulated markets from offering contracts that resemble sports betting or casino games, or that track wars, elections, and government actions. The statute would moot the Utah case while creating a national rule for prediction markets.

4

Supreme Court settles whether federal law shields prediction markets

Possible Resolves by Q2 2027

Discussed by: The Block and nextpredict, covering New Jersey's cert petition and the circuit split

New Jersey has asked the Supreme Court to review the Third Circuit ruling that favored Kalshi, and the petition is docketed. The Sixth Circuit's September loss for Kalshi in Ohio and Tennessee widens the split, since that court found Kalshi's sports contracts are not federally regulated swaps. The Court could decide whether the Commodity Exchange Act preempts state gambling laws.

Historical Context

3 moments from history that rhyme with this story — and how they unfolded.

September 2024

Kalshi v. CFTC (2024)

D.C. District Judge Jia Cobb ruled the CFTC overstepped by blocking Kalshi's election contracts, saying the agency couldn't ban contracts just because betting on them might undermine public confidence. Kalshi began offering congressional control markets within days.

Then

Prediction markets expanded into U.S. elections, with heavy trading on the 2024 presidential race.

Now

Established that CFTC-registered exchanges can offer event contracts absent explicit commission rules, fueling the state pushback Utah's law represents.

Why this matters now

The preemption argument Kalshi won in Washington failed in Utah, showing how the fight over prediction-market jurisdiction is playing out differently across courts.

May 2018

Murphy v. NCAA (2018)

The Supreme Court struck down the Professional and Amateur Sports Protection Act, the 1992 federal law that barred most states from legalizing sports betting. The ruling returned the decision to the states.

Then

New Jersey and then dozens of states legalized sports betting within a few years.

Now

Affirmed that states, not the federal government, set gambling policy within their borders—the principle Utah now leans on.

Why this matters now

Utah's argument echoes Murphy: states hold authority to ban or allow gambling, and federal commodities law doesn't strip that power.

1900s-1930s

Bucket shop crackdown (early 1900s)

Bucket shops let people bet on stock and grain prices without taking real positions, and states treated them as illegal gambling. The Grain Futures Act of 1922 and the Commodity Exchange Act of 1936 drew a line between these gambling operations and legitimate futures exchanges.

Then

Federal regulation of futures created an orderly market while states kept anti-gambling laws on the books.

Now

The Commodity Exchange Act's structure of overlapping state and federal authority persists—and is now at the center of the Kalshi case.

Why this matters now

The current fight reprises an old question: where does speculation end and gambling begin, and which level of government gets to decide.

Sources

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