Utah seeks up to US$61.2m from Kalshi over betting laws

A complaint was submitted by Utah Attorney General Derek Brown on 20 October in the state's Third District Court. The defendants named are the prediction market operator Kalshi, one of its affiliates and two trading firms connected to Susquehanna. State gambling laws are said to have been broken by all of them. It was reported that the filing asks for as much as $61.2m in restitution plus other financial remedies, and for orders that would halt the allegedly unlawful conduct.

Residents of Utah should no longer be able to obtain event contracts tied to sports, politics, elections and culture, according to the state. Further requests in the filing include limits on where the platform can be reached and the return of profits that the state characterises as proceeds of illegal transactions. Trades by Utah users are put at a combined $3bn, producing fees for Kalshi of somewhere between $30.6m and $61.2m, the complaint says. It adds that no fewer than 32,000 people in the state have traded on the platform.

According to the attorney general's office, markets were made available to people in Utah from September 2024 onward, and the company did so while aware that state law was being broken. Brown repeated that Utah has opposed gambling for a very long time, a stance he said dates back to its admission as a state in 1896.

Utah's reading of its gambling law is disputed by Kalshi, which contends that federal financial rules govern how it operates. In the words of a company spokesperson: "Kalshi is a federally regulated financial exchange, like the stock market. Our customers trade with each other and set the prices. As a national derivatives market overseen by the CFTC, the company answers to federal law, and no single state should have a veto over it."

In August, US District Judge Robert J. Shelby granted summary judgment in favour of Utah against Kalshi, concluding that the Commodity Exchange Act does not preempt the state's gambling laws. The ruling held that the CEA does not prevent Utah from enforcing its anti-gambling laws against Kalshi's sports event contracts.