Utah Attorney General Derek Brown filed a lawsuit Tuesday against Kalshi, several of its subsidiaries, and two financial trading firms that work with the company, accusing them of violating the state’s anti-gambling laws.
In the lawsuit, the state compares Kalshi to a “back-alley gambling den,” arguing that the company facilitates bets and takes a percentage of the money that’s bet on its platform.
Utah is asking a court to block Kalshi from offering wagers in the state. It also wants the company to use a court-approved geolocation service to prevent Utah residents from placing bets on the platform. And the state is seeking to recover millions of dollars the company allegedly made from illegal gambling. According to the lawsuit, Kalshi has collected an estimated $30.6 million to $61.2 million in fees from wagers placed by Utah users.
Utah is the latest state to take legal action against Kalshi as the company and rival Polymarket face a growing wave of lawsuits over allegations that they are operating illegal gambling businesses.
At the center of these legal battles is whether the platforms’ event contracts are federally regulated financial products or wagers subject to state gambling laws.
Prediction markets allow users to buy and sell contracts based on the outcomes of future events, from sporting events and elections to the weather.
The Trump administration, meanwhile, seems to be backing prediction markets, with the U.S. Commodity Futures Trading Commission (CFTC) pushing back against states trying to regulate the industry.
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