Utah Sues Kalshi Over Alleged Illegal Betting, Seeks Up to $60M in Profits

Utah Attorney General Derek Brown has sued Kalshi, its affiliates and two Susquehanna trading firms, claiming the prediction market operated as illegal betting in the state from 2024 onward. At a Tuesday briefing, he called the operation a public nuisance causing ongoing harm to residents. Officials want a court to force the companies to give back an estimated $30 million to $60 million in profits and to halt bets on sports, elections, politics, culture and mentions. The state says more than 32,000 Utah users took part, leading to heavy losses.

Kalshi Defends Its Federal Standing

Kalshi spokesperson Jacki McGavick said the company is a federally regulated exchange, where customers trade with each other and set prices. She argued that, as a national derivatives market overseen by the CFTC, Kalshi answers to federal law and no single state should hold a veto. The company added that the new state action does not change its ongoing federal litigation.

How the Utah Fight Got Here

Kalshi sued Utah in February after lawmakers classed prediction market betting as gambling under state law. In August a judge sided with Utah, ruling that federal CFTC rules do not override state gambling laws. In September an appellate court denied Kalshi’s request for an injunction that would have let it keep operating during its appeal.

State Actions Against Prediction Markets Grow

Utah’s suit is one of many filed against platforms such as Kalshi and Polymarket. Arizona is the only state pursuing criminal charges against Kalshi, while Michigan, Ohio, Kentucky, Nevada, Massachusetts, Wisconsin and New York have brought civil cases. The timing matters because the US Supreme Court is weighing whether to hear New Jersey’s case against Kalshi, which could settle whether states or the CFTC, which claims exclusive jurisdiction, oversee these event contracts.