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Utah is suing Kalshi, asking a judge to stop the prediction market platform from offering wagers in the state and recover millions in fees and resident losses.
The case challenges Kalshi’s position that its markets fall under federal regulatory authority rather than state gambling restrictions.
Utah Seeks a Halt to Kalshi Wagers and Financial Recovery
Utah alleges Kalshi has engaged in a “brazen pattern of unlawful conduct,” according to The Salt Lake Tribune. The state says the platform’s operations violate Utah’s gambling ban, which the complaint describes as grounded in the state constitution.
The state estimates Kalshi collected between $30.6 million and $61.2 million in fees from trades placed by Utah accounts. It also says residents lost $5.5 million in individual trades. Utah is seeking recovery of those fees and losses, along with an order stopping the platform from operating in Utah.
There are more than 32,000 Utahns with Kalshi accounts.
Why Utah Says Event Contracts Are Gambling
The complaint argues that Kalshi acts as a market maker, facilitates bets and retains a portion of each bet as payment. It also says an entity within Kalshi’s operation finalizes and settles wagers, including making payouts.
“It is administering a closed-loop wagering system, where it creates the games, handles the bets, and pays out the winners,” the complaint says.
Utah argues that any distinction between Kalshi’s business and gambling collapsed when the platform began offering sports trading and using betting language associated with professional football and other sports. The state describes its event contracts as indistinguishable from sportsbook offerings such as proposition bets, parlays and point-spread bets.
The allegations extend beyond sports. The complaint cites markets involving elections, politics, culture and whether particular words will be mentioned. It says Kalshi offered between 100,000 and 300,000 open wagers per day during three months over the summer and regularly adds more.
Federal Authority Remains Part of the Dispute
Kalshi previously sued Utah preemptively, arguing that the Commodity Futures Trading Commission has authority over its markets. That position puts regulatory jurisdiction at the center of the dispute: Utah is seeking to enforce its gambling ban against products Kalshi argues fall under federal oversight.
According to the Tribune, a federal judge ruled for Utah in that case in August, and Kalshi appealed to the 10th U.S. Circuit Court of Appeals.
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Source: As reported by The Salt Lake Tribune.
