Utah Sues Kalshi Over Illegal Gambling, Seeks Return of Up to $60 Million
Summary
- Utah said it had sued prediction-market platform Kalshi over allegations of illegal gambling operations, seeking to recover about $30 million to $60 million in revenue and halt the service.
- Courts and an appeals court have repeatedly sided with Utah, leaving Kalshi unable to operate the service in the state while the appeal process continues.
- Several states, including Michigan, Ohio, Nevada, New York and Arizona, are pursuing civil and criminal cases against Kalshi and Polymarket, while the US Supreme Court is considering whether to hear a dispute over who has authority to regulate prediction markets.
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Utah has sued prediction-market platform Kalshi, accusing it of operating illegal gambling services and seeking to recover related revenue and halt the service.
Cointelegraph reported on October 20 that Utah Attorney General Derek Brown announced at a press conference that the state had filed a civil lawsuit against Kalshi, its affiliates and two trading firms tied to Susquehanna. Utah argues the companies should return about $30 million to $60 million in revenue generated by illegally offering event contracts since 2024.
Utah authorities say Kalshi provided illegal betting services to more than 32,000 users in the state, causing substantial financial harm. Brown said prediction betting across sports, elections, politics and culture has inflicted continuing harm on residents and asked the court to shut down the related services.
The legal dispute between Kalshi and Utah has been running since earlier this year. Kalshi sued in February after Utah passed a bill classifying prediction-market betting as gambling. In August, however, a court sided with Utah, finding that federal oversight by the Commodity Futures Trading Commission did not preempt state gambling laws.
In September, an appeals court also rejected Kalshi's request for an injunction. As a result, Kalshi cannot operate the service in Utah while the appeal process continues. Kalshi did not immediately respond to a media request for comment on the latest lawsuit.
Across the US, conflicts between state governments and prediction-market operators are spreading. Civil lawsuits have been filed in states including Michigan, Ohio, Nevada and New York against Kalshi or Polymarket, while Arizona has gone further and brought criminal charges against Kalshi.
Separately, the US Supreme Court is considering whether to hear a dispute between New Jersey and Kalshi over illegal sports betting. If the court takes the case, it could deliver a significant ruling on whether oversight of prediction markets belongs to state governments or to the CFTC, which claims exclusive jurisdiction.
Suehyeon Lee
shlee@bloomingbit.ioI'm reporter Suehyeon Lee, your Web3 Moderator.