Utah operators restrict prediction markets after charges against Kalshi
Regulation2 min read
In brief
- DraftKings, FanDuel, Fanatics and PrizePicks have restricted some prediction market products in Utah.
- Utah filed 14 criminal charges against Kalshi, including 13 felonies and one misdemeanor.
- Fanatics Markets will stop accepting trades in Utah on 4 November.
- The CFTC and the US Department of Justice have sued Utah over its enforcement.
Utah's 14 criminal charges against Kalshi have led DraftKings, FanDuel, Fanatics and PrizePicks to pare back what they offer in prediction markets there. How far each operator goes differs.
DraftKings Predictions immediately discontinued sports, political, novelty and "certain other event contracts" for customers physically located in Utah. Customers there can continue to trade financial event contracts linked to stocks, commodities and cryptocurrencies. DraftKings said existing positions in the affected markets will stay open and settle normally.
On Friday morning, FanDuel Predicts ended its sports, political and novelty contracts for Utah. Customers can still trade on economic benchmarks and financial indicators, and positions already held will stay open and settle as expected.
Fanatics Markets will halt trading in Utah on Nov. 4. Citing "recent developments," the company said in a statement that it is stopping trade placement on Fanatics Markets in Utah on Nov. 4.
In Utah, PrizePicks switched off Team Picks and Culture Picks. Its Player Picks, styled like daily fantasy sports, are still offered. Team Picks span sports events, leagues, teams and outcomes over a whole season, whereas Culture Picks cover politics, entertainment and pop culture.
Utah Attorney General Derek Brown filed 14 criminal charges against Kalshi, made up of 13 felonies and one misdemeanor. The charges name the company along with co-founders Tarek Mansour and Luana Lopes Lara, alleging illegal promotion of online gambling. The charging documents describe an undercover state investigator who signed up with Kalshi and made 12 sports-contract trades in September. Brown said: "Gambling is illegal in Utah, whether you place the bet, run the game, or promote it." Under Utah's constitution, lawmakers cannot approve games of chance, lotteries or gift enterprises.
Brown had already sued Kalshi and affiliated entities in a civil case on Oct. 20. That case aims to halt the company's event contracts and claw back profits it allegedly made from illegal gambling. Brown further cautioned other prediction market operators to read the complaint and follow state law.
The Commodity Futures Trading Commission (CFTC) and the U.S. Department of Justice have sued Utah, seeking to stop the state's gambling enforcement against prediction markets. The CFTC's position is that the Commodity Exchange Act makes it the sole authority for federally regulated event contracts, and that this overrides state gambling limits. Another suit against Utah was filed the same day by Crypto.com and its affiliated OG.com platform.
DraftKings, FanDuel and Fanatics are reportedly taking a more careful stance, confining sports event contracts to states where those firms don't run licensed sportsbooks. Kalshi and Polymarket, by contrast, keep contesting state gambling restrictions in court.