Utah seeks US$61.2m from Kalshi over betting laws
The state is seeking to block sports, political and cultural event contracts for Utah residents as the dispute over federal oversight continues.
Key takeaways
- Utah Attorney General Derek Brown has filed a complaint against Kalshi, its affiliate and two Susquehanna trading firms.
- The state is seeking up to US$61.2m in restitution and other financial remedies.
- Kalshi accounts in Utah generated an alleged US$30.6m–US$61.2m in fees from US$3bn in trades.
- Utah wants to block access to event contracts covering sports, politics, elections and culture, while Kalshi maintains that federal regulation takes precedence over state gambling laws.
U.S.- Utah Attorney General Derek Brown has filed a new complaint against prediction market operator Kalshi, an affiliate and two Susquehanna trading firms, accusing them of violating state gambling laws. Submitted on October 20 to Utah’s Third District Court, the action seeks up to US$61.2m in restitution and other financial remedies, alongside measures to prevent the companies from continuing the alleged unlawful activity.
The state wants Kalshi to stop offering event contracts related to sports, politics, elections and culture to Utah residents. Brown’s office is also seeking geographic restrictions on access to the platform and the recovery of profits it says were obtained through illegal transactions.
According to the complaint, Kalshi generated between US$30.6m and US$61.2m in fees from accounts in Utah, where users placed trades worth a combined US$3bn. The filing states that at least 32,000 residents have used the platform.
Brown’s office alleges that Kalshi began offering markets to Utah users by September 2024, despite knowing that the activity violated state law. The attorney general reiterated the state’s longstanding opposition to gambling, saying it has maintained that position since becoming a state in 1896.
Kalshi has rejected Utah’s position, arguing that the platform operates under federal financial regulation and should not be subject to the state’s interpretation of gambling law. “Kalshi is a federally regulated financial exchange, like the stock market. Our customers trade with each other and set the prices. As a national derivatives market overseen by the CFTC, the company answers to federal law, and no single state should have a veto over it,” a company spokesperson said.
In August, a federal judge in Utah ruled that the Commodity Exchange Act (CEA) does not prevent the state from enforcing its anti-gambling laws against Kalshi’s sports event contracts. US District Judge Robert J. Shelby granted summary judgment in favour of Utah against the prediction market operator, concluding that the CEA does not preempt the state’s gambling laws.
Frequently asked questions (FAQs)
- How many Utah residents have used Kalshi? The complaint states that at least 32,000 residents have used the platform, placing trades worth a combined US$3bn.
- Why does Kalshi argue that Utah cannot ban its event contracts? Kalshi says it operates as a federally regulated financial exchange overseen by the Commodity Futures Trading Commission (CFTC) and should therefore be governed by federal law rather than individual states’ gambling restrictions.
