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Utah has filed felony charges against Kalshi and its co-founders over alleged online gambling promotion, while the Commodity Futures Trading Commission is challenging the state’s restrictions on prediction markets.
Utah Atty. Gen. Derek Brown filed charges against Kalshi and co-founders Tarek Mansour and Luana Lopes Lara.
Utah Hits Kalshi Founders With Felonies
The charges include 12 felony counts of online gambling promotion, one felony count of pattern of unlawful activity and one misdemeanor count of general gambling promotion.
According to Utah’s charging documents, an undercover agent using Utah geolocations was able to place trades on multiple sports events. Brown also filed a civil lawsuit seeking to stop Kalshi from accepting transactions from Utah residents.
Utah’s constitution contains anti-gambling provisions, and the state passed legislation in 2026 explicitly banning prediction markets. A federal judge previously ruled that Kalshi is subject to Utah’s anti-gambling law.
Kalshi spokesperson Jacki McGavick disputed the state’s action.
“This is a crazy overreach; Utah is clearly playing politics. We look forward to putting a stop to this in court, just like we did in Arizona,” McGavick said.
CFTC Challenges Utah’s Authority Over Event Contracts
The CFTC filed its own legal challenge against Utah, seeking to block the state’s ban on derivatives markets. Its complaint argues that Utah’s enforcement intrudes on federal authority over commodity derivatives exchanges.
“Utah, however, is attempting to block the operation of exchanges that the Commission has expressly approved, as well as event contracts that have been self-certified to the Commission and that the Commission has permitted to be listed,” the agency said in its complaint.
The competing cases put state gambling prohibitions and the CFTC’s asserted federal jurisdiction at the center of the dispute over Kalshi’s operations.
In Arizona, a federal judge previously permanently blocked the state from criminally prosecuting Kalshi, finding that federal law preempts state enforcement. Arizona is seeking to revive that case.
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Source: As reported by Utah News Dispatch.
