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Utah sues Kalshi for alleged illegal gambling
Utah Attorney General Derek Brown has filed a civil lawsuit against prediction market platform Kalshi, its affiliates, and two Susquehanna trading companies. The state alleges the companies have been facilitating illegal gambling in Utah since 2024 by offering event contracts related to sports, elections, politics, and culture.
The lawsuit claims Kalshi’s operations have caused “significant and substantial ongoing harm” to residents, noting that approximately 32,000 to 33,000 verified Utah users have utilized the platform. Utah officials estimate that residents have lost between $36 million and $66 million through transaction fees and betting losses, and is seeking to recoup between $30 million and $60 million in alleged profits.
This legal action follows previous rulings in which Utah courts determined that federal oversight by the Commodity Futures Trading Commission (CFTC) does not preempt state gambling laws. Kalshi maintains that it is a federally regulated financial exchange and that its contracts are derivatives, not gambling. The dispute is part of a broader national legal conflict regarding whether prediction markets fall under state gambling authority or federal jurisdiction.
Entities
Commodity Futures Trading Commission · Derek Brown · Kalshi · Susquehanna · Susquehanna International Group · Utah
Claims
What the coverage asserts, and how many sources carry each claim.
- [● 2 SOURCES] The lawsuit alleges Kalshi's event contracts are indistinguishable from sportsbook wagers. defirate.com · localnews8.com
- [● 3 SOURCES] Kalshi had nearly 33,000 verified Utah accounts as of February. defirate.com · localnews8.com · cointelegraph.com
- [● 2 SOURCES] Utah residents lost between $36 million and $66 million through transaction fees and betting losses. defirate.com · localnews8.com
- [○ 1 SOURCE] Utah is seeking to recover between $30 million and $60 million in profits. cointelegraph.com
- [○ 1 SOURCE] Utah is seeking court-approved third-party geolocation controls. defirate.com
- [○ 1 SOURCE] A judge ruled that federal laws under the CFTC do not preempt state gambling laws. cointelegraph.com
- [● 3 SOURCES] Utah Attorney General Derek Brown filed a civil lawsuit against Kalshi and two Susquehanna entities. defirate.com · localnews8.com · cointelegraph.com
- [● 2 SOURCES] Kalshi accused of advertising its betting activity as legal in all 50 states. defirate.com · localnews8.com