Pull to refresh
Logo
Utah sues Kalshi in state court, calling its sports contracts illegal gambling

Utah sues Kalshi in state court, calling its sports contracts illegal gambling

Rule Changes Salt Lake City, UT local

Attorney General Derek Brown asks the court to stop Kalshi taking Utah bets and estimates its fees from Utah accounts at $30.5 million to $61.1 million

Today: Utah sues Kalshi in state court

Overview

Updated 3 hours ago

Utah Attorney General Derek Brown filed a lawsuit against Kalshi on Tuesday in Utah's Third District Court in Salt Lake City. The complaint names Kalshi, KalshiEx, Kalshi Klear, Kalshi Trading and two Susquehanna entities, and says the prediction market's sports and event contracts are illegal gambling under Utah law. Brown also declared gambling a public nuisance in the state.

The state asks the court to stop the companies operating in Utah, enforced through a court-approved geolocation provider, and to order restitution and the surrender of profits. It estimates Kalshi earned $30.5 million to $61.1 million in fees from Utah accounts and that Utah bettors lost at least $5.5 million. The suit follows an August 4 federal ruling by U.S. District Judge Robert J. Shelby that Utah's gambling ban applies to Kalshi's sports contracts, rejecting Kalshi's argument that federal commodities law shields it.

Why it matters

If this ruling holds, states can enforce gambling bans against prediction markets, potentially fragmenting a fast-growing industry.

Monday: what changed in Salt Lake City, UT

One short email a week with the openings, closings, permits and council votes we covered. Free. Unsubscribe in one click.

Questions about this story

Free account needed to ask — your question is kept and asked for you right after sign-up. Answers are public.

No questions yet — be the first to ask.

Key Indicators

$30.5M-$61.1M
Kalshi fees from Utah accounts, state estimate
Utah's complaint estimates Kalshi's one- to two-cent fees on Utah wagers at $30.5 million to $61.1 million.
5
States pursuing legal action against prediction markets
Utah, New York, Washington, Nevada and Arizona have gone after prediction markets, per Courthouse News.

Voices

Curated perspectives — historical figures and your fellow readers.

Ever wondered what historical figures would say about today's headlines?

Sign up to generate historical perspectives on this story.

People Involved

Organizations Involved

Timeline

February 2026 October 2026

7 events Latest: Today
Tap a bar to jump to that date
  1. CFTC chairman declares federal jurisdiction over prediction markets

    Statement

    Mike Selig announces the commission will defend prediction markets from state actions.

Scenarios

1

Kalshi wins on appeal at 10th Circuit

Possible Resolves by End of 2027

Discussed by: Kalshi's legal team, which argues multiple courts have recognized federal jurisdiction over prediction markets

Kalshi appeals the summary judgment to the 10th Circuit Court of Appeals. The company argues the Commodity Exchange Act and Dodd-Frank Act give the CFTC exclusive jurisdiction, and that the district court misread the law. If the 10th Circuit reverses, states would lose a key tool to regulate prediction markets.

2

Appeals court upholds ruling, states gain momentum

Likely Resolves by End of 2027

Discussed by: Utah Attorney General's Office and state regulators who have filed similar actions

The 10th Circuit affirms the district court's ruling, giving states a clear legal basis to enforce gambling laws against prediction markets. Other states, including New York, Washington, and Nevada, would likely cite the ruling in their own cases. The decision could push the industry toward state-by-state licensing or bans.

3

Supreme Court resolves the case

Possible Resolves by End of 2028

Discussed by: Legal analysts watching for a circuit split on federal preemption of state gambling laws

If other federal courts reach different conclusions on whether the Commodity Exchange Act preempts state gambling laws, a circuit split could emerge. The Supreme Court would then be likely to grant certiorari to resolve the question. A ruling could settle the scope of CFTC jurisdiction over prediction markets nationwide.

Historical Context

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

May 2018

Murphy v. NCAA (2018)

The Supreme Court struck down the Professional and Amateur Sports Protection Act, which had banned sports betting in most states since 1992. The case began when New Jersey challenged the federal law to legalize sports betting in the state.

Then

States gained authority to legalize sports betting. New Jersey and other states quickly moved to legalize.

Now

Sports betting expanded to dozens of states, creating a multi-billion-dollar industry.

Why this matters now

Shows the Supreme Court's role in resolving federal-state disputes over gambling, and the historical pattern of states regulating gambling within their borders.

July 2010

Dodd-Frank Act (2010)

Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act in response to the 2008 financial crisis. The law expanded the Commodity Exchange Act's authority over derivatives and swaps.

Then

The CFTC gained new authority over the derivatives market.

Now

Kalshi has cited Dodd-Frank to argue that federal commodities law preempts state gambling laws.

Why this matters now

The judge rejected Kalshi's argument, saying it's implausible Congress would silently reverse state gambling authority in a financial crisis law.

Sources

(5)