Utah Attorney General Derek Brown has sued prediction market platform Kalshi, alleging that its sports and political event contracts violate state gambling laws. The lawsuit seeks to halt the platform’s operations in Utah and recover up to $60 million in restitution.
Filed in Utah’s Third District Court, the complaint alleges Kalshi provided services to more than 32,000 verified users in the state. Brown also described online gambling as a public nuisance.
Utah Challenges Kalshi’s Prediction Markets
Brown said Utah has opposed gambling since becoming a state in 1896, including betting conducted through mobile phones. Kalshi argues that federal oversight protects its event contracts from state gambling restrictions. However, a federal judge rejected the company’s challenge in August, allowing the lawsuit to proceed.
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The case centers on whether prediction markets fall under federal commodities regulation or state gambling laws.
Prediction Markets Face Legal Challenges
The dispute extends beyond Utah. The NFL has asked the US Supreme Court to determine whether sports event contracts qualify as swaps under the Commodity Exchange Act. In an October 8 brief, the league argued the case could clarify states’ authority over federally regulated prediction markets.
Separately, Taiwan has blocked access to Kalshi and Coinbase over suspected election betting ahead of its November 28 local elections.
The Utah lawsuit adds to ongoing legal disputes over how prediction markets should be regulated.
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