Utah Brings the Poker Chips to Kalshi as Prediction-Market Clash Heads to Court

Utah has filed criminal charges against prediction market Kalshi and co-founders Tarek Mansour and Luana Lopes Lara, accusing them of illegally promoting gambling in the state. KalshiEX LLC, CEO Tarek Mansour and COO Luana Lopes Lara face one count of pattern of unlawful activity, a second-degree felony, 12 counts of online gambling promotion, a third-degree felony, and one count of gambling promotion, a misdemeanor.

“Gambling is illegal in Utah, whether you place the bet, run the game, or promote it. Calling it a 'prediction market' doesn't change what it is, and being federally registered doesn't put a company above the law,” Utah Attorney General Derek Brown said in a statement. According to the charges, a special agent with the Utah State Bureau of Investigation created an undercover account as a Utah resident and placed 12 wagers on sports, including NFL and college games, in September, passing a location check confirming he was in the state. Prosecutors allege Kalshi earned proceeds from fees charged on each bet. Brown’s office did not say what penalties it would seek, though the felony charges carry the possibility of jail time.

Kalshi called the prosecution “a crazy overreach,” adding: “Utah is clearly playing politics.” The company said: “We look forward to putting a stop to this in court, just like we did in Arizona.” Utah sued Kalshi in state court last week, citing the state constitution’s ban on gambling. On Tuesday, the Commodity Futures Trading Commission sued Utah to block its enforcement actions against CFTC-registered exchanges, making Utah the 10th state the agency has taken to court.

“Congress entrusted the CFTC to be the federal regulator with sole responsibility to oversee these markets,” CFTC Chairman Michael Selig said. Utah won an earlier round in August when U.S. District Judge Robert Shelby rejected Kalshi’s bid to block enforcement, ruling that federal law “does not preempt Utah's ability to enforce its anti-gambling laws.” Kalshi is appealing to the Tenth Circuit, which denied its request for an injunction in September.

U.S. President Donald Trump also pressed Tuesday for federal regulators to maintain control over prediction markets, calling the issue “critically important.” “We cannot have SCUM like Chris Christie, Letitia James, Tim Walz, and JB Pritzker setting the rules,” Trump wrote on Truth Social, adding that the CFTC’s “exclusive authority” should be maintained. Trump had backed the CFTC in May, saying it was “critically important that the CFTC's exclusive authority over Prediction Markets is maintained,” and calling several state officials who challenged the platforms “scum.” Federal appeals courts have split.