Utah charges Kalshi, executives as prediction markets face legal showdown

Utah is bringing criminal charges against Kalshi and two of the company’s top executives, alleging they illegally profited from promoting and offering online gambling within the state.

The prediction market platform , alongside CEO Tarek Mansour and chief operating officer Luana Lopes Lara, is facing 13 felony counts and one misdemeanor count, according to a recent court filing.

“Gambling is illegal in Utah, whether you place the bet, run the game, or promote it,” Utah Attorney General Derek Brown (R) said in a statement. “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 court has already ruled that Utah’s gambling laws apply to Kalshi,” he continued. “Kalshi kept taking bets from Utahns anyway. That is illegal, and we’re putting a stop to it.”

Utah previously faced off against Kalshi in court, when the company sued the state in February to block it from enforcing its anti-gambling laws against the platform. But a federal judge ruled in August that federal law does not preempt state enforcement.

This comes amid a broader legal fight between states and prediction markets over whether the platforms fall under the jurisdiction of state or federal regulators. After several appellate courts reached different conclusions, New Jersey asked the Supreme Court last month to weigh in on the dispute.

In bringing criminal charges against Kalshi and its executives, Utah alleges the company “derived proceeds from multiple episodes of online gambling promotion, which is illegal” under the state’s laws.

It pointed to a dozen instances between Sept. 13 and Sept. 24 in which Kalshi “intentionally provided or offered to provide a form of online gambling” to a state law enforcement official.

The official used an undercover persona who was a Utah resident with a Utah address, phone number and bank account, while verifying that his geolocation and public IP address showed him in the state. He placed a series of wagers on various sporting events through Kalshi.

“Through the fees charged on each wager, Kalshi received proceeds derived, directly or indirectly, from a pattern of unlawful activity in which it participated as a principal, and used or invested those proceeds, directly or indirectly, in the establishment or operation of the enterprise,” the filing reads.

However, prediction markets like Kalshi argue they offer a product distinct from traditional gambling and are federally regulated by the Commodity Futures Trading Commission (CFTC).

“This is a crazy overreach; Utah is clearly playing politics,” a Kalshi spokesperson said in a statement. “We look forward to putting a stop to this in court, just like we did in Arizona.”

Arizona similarly brought criminal charges against Kalshi earlier this year, accusing the firm of operating an illegal gambling operation and improperly allowing for wagering on elections. However, a judge blocked the state from moving forward with the case in April.