Utah Attorney General Sues Prediction Market Platform Kalshi Over Illegal Wagering
Utah filed a lawsuit seeking to stop Kalshi from offering wagers in the state and to recover fees and losses, arguing the platform operates as an illegal gambling service under state law.
Utah Attorney General Derek Brown filed a complaint in state court accusing prediction-market platform Kalshi of violating the state’s constitutional ban on gambling. The lawsuit seeks a court order to halt Kalshi’s wagering services in Utah, the implementation of a geolocation tool to enforce the ban, and restitution for fees collected from Utah residents and losses incurred by bettors.
Brown said the action targets the companies, not the more than 32,000 Utah users who have verified accounts, adding, "Let me be clear: It’s against the companies. It’s not against you."
The complaint alleges that Kalshi, along with four subsidiaries and two Pennsylvania-based trading firms, knowingly operates a closed-loop wagering system that creates contracts, accepts bets, and pays out winners, functions the state argues are indistinguishable from traditional sportsbook bets. It cites offerings that include sports events, political outcomes, cultural events and other speculative contracts.
Utah estimates Kalshi has earned between $30.6 million and $61.2 million in fees from Utah users and that residents have lost about $5.5 million on wagers. The state says it will seek further details as the case proceeds toward a possible civil trial.
Kalshi, which has previously described related lawsuits as "political theater," has not responded to a request for comment. The company is appealing a prior federal ruling that upheld Utah’s authority to regulate its platform, and the appeal remains pending before the 10th U.S. Circuit Court of Appeals.
The lawsuit follows similar actions by other states challenging the classification of prediction-market contracts as financial instruments rather than gambling under state law.