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State of Play’s TL;DR
- Utah filed criminal charges against prediction market operator Kalshi and two executives.
- Kalshi argues that prediction markets fall exclusively under federal jurisdiction.
- Arizona’s earlier criminal case against Kalshi was put on hold by a judge.
Utah filed criminal charges against Kalshi, Chief Executive Officer Tarek Mansour, and Chief Operating Officer Luana Lopes Lara, alleging violations of the state’s gambling prohibition.
The charges include 13 counts of violating that prohibition and one charge involving profiting from illegal activity.
The case escalates a dispute over whether state gambling laws apply to prediction markets, with litigation spread across roughly 20 states.
Utah presses ahead after court setbacks for Kalshi
Utah Attorney General Derek Brown said Kalshi continued operating in the state despite a federal court ruling that Utah’s gambling laws apply to the company.
“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.”
A federal judge rejected Kalshi’s request to block Utah from enforcing its gambling restrictions. AccessNorthGA reported that the 10th US Circuit Court of Appeals declined to halt Utah’s enforcement during Kalshi’s appeal.
Kalshi called the charges a “crazy overreach” and said, “Utah is clearly playing politics.”
Utah has also pursued a separate civil action. The state sued Kalshi and several related companies the previous week, seeking to stop trading in Utah on sports, elections, politics, culture, and other outcomes. The state also asked for a court-approved geolocation provider and an order requiring the defendants to give up profits made in Utah.
Kalshi filed suit against the state in February, anticipating that Utah officials would try to ban them.
Federal authority remains at the center of the fight
Kalshi argues that prediction markets are exclusively subject to federal jurisdiction, rather than state gambling laws. Under President Donald Trump, the Commodity Futures Trading Commission (CFTC) has sued at least 10 states, including Utah on Tuesday, to try to stop states from regulating prediction markets.
Arizona became the first state to file criminal charges against Kalshi earlier this year. A judge later put that case on hold.
Based on reporting by AccessNorthGA and Daily American Republic.
