Utah sues Kalshi to block prediction markets and recover up to $61.2m

Utah has sued Kalshi in state court, seeking preliminary and permanent injunctions to block the prediction market operator's sports, elections, politics, culture and mentions-based contracts in the state, and restitution, damages and disgorgement of profits. The complaint was filed by Utah Attorney General Derek Brown against Kalshi and two Susquehanna market maker firms. The state wants the injunctions enforced through a third-party geolocation provider.

The filing puts the number of Kalshi accounts tied to Utah addresses at 32,940 as of February 2026. Fee revenue from those accounts is estimated by the state at $30.6 million to $61.2 million, and retail bettor losses at about $5.5 million. In the complaint, Kalshi is described as “the manager of a back-alley gambling den (or cardroom)” for handling wagers and taking a cut of bets, while the market makers are compared to professional poker players taking bets at the table.

Brown said in a statement: "Kalshi runs an online casino in Utah and calls it a prediction market. That violates Utah law."

Utah had won a favorable ruling in federal court more than two months before filing, when the state defeated Kalshi's contention that federal law blocks enforcement of its gambling restrictions. In that August decision, U.S. District Judge Robert Shelby held that the Commodity Exchange Act does not preempt Utah's gambling laws, marking the first final merits judgment among the state cases against prediction markets. Kalshi took the matter to the Tenth Circuit, which turned down its September bid for an emergency injunction; the full appeal is still unresolved. It was reported that the operator will likely shift the new case to federal court. A Utah win would add it to Nevada, Michigan and Washington, states where court orders have already compelled Kalshi to limit some event contracts.