Utah Sues Prediction Platform Kalshi

Utah Attorney General Derek Brown filed a lawsuit against the prediction market platform Kalshi on October 20. According to the complaint, Kalshi's yes/no event contracts are indistinguishable from the bets offered by a traditional sports betting site. The complaint likens the company to "the operator of a back-alley gambling den."

The state is asking that Kalshi's operations in Utah be halted and that the harm caused since at least September 2024 be compensated. The complaint argues that the company's running, marketing and profiting from illegal gambling activity amounts to a "public nuisance" that disturbs public safety, peace and welfare.

Brown said they are also asking the court to order the defendants to return their gains, pay damages and take responsibility for the problem caused in the state. The Attorney General estimates that Kalshi earned between 30,591,600 and 61,183,200 dollars in revenue from "illegal bets" placed from Utah accounts. The losses of Utah residents are calculated at about 5.5 million dollars.

The complaint states that Kalshi has continued operating even though a federal court recently rejected the company's argument that it is not bound by Utah law. Brown also called on other companies in Utah to read the complaint and comply with the law.

Kalshi, for its part, describes itself as a federally regulated financial platform, like an exchange. The company argues that it is subject to federal law and that no state has a veto over this matter.