Utah sues to stop Kalshi from offering trading in the state

Utah has filed a new lawsuit against the prediction market platform Kalshi. In a complaint submitted to the Utah Third District Court on Tuesday, October 20, Attorney General Derek Brown argued that Kalshi, its affiliate and two trading firms owned by Susquehanna violated the state's gambling laws. The damages and financial penalties sought reach up to $61.2 million.

The petition asks for Kalshi to stop offering event contracts in sports, politics, elections and culture, for geofencing restrictions to be imposed, and for the return of gains allegedly obtained from unlawful transactions. According to the Attorney General's Office, the company collected between $30.6 million and $61.2 million in fees on $3 billion in trading volume from Utah accounts. At least 32,000 Utah users traded on the platform.

The complaint alleges that Kalshi began offering its markets by September 2024 and knew they did not comply with state law. Brown said Utah has been firmly opposed to gambling since the day it became a state in 1896.

Kalshi, for its part, argued that it is a federally regulated financial exchange. A company spokesperson said the platform is a national derivatives market overseen by the CFTC, that no state should have a veto over it, and that the new lawsuit does not affect the ongoing federal proceedings.

In the legal process that began in February, U.S. Federal Judge Robert Shelby found Kalshi's defense insufficient in August and granted summary judgment in favor of the state. Kalshi appealed to the Tenth Circuit Court of Appeals, and no decision has been issued yet. Brown did not announce a plan for a criminal investigation but hinted that this is part of a broader investigation.