Utah officials have brought felony criminal charges against prediction market Kalshi and its two co-founders for allegedly illegally offering gambling to the state's residents.

Tarek Mansour and Luana Lopes Lara each 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 general gambling promotion, a Class A misdemeanor. All gambling is illegal in Utah.

Utah also recently filed a civil lawsuit against Kalshi, seeking to prevent it from offering Utah residents betting opportunities on sports, elections, and other events.

A special agent with the Utah State Bureau of Investigations signed up for an account on Kalshi as a fictional Utah resident and says he was allowed to place bets on several football games.

"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. "A federal court has already ruled that Utah’s gambling laws apply to Kalshi. Kalshi kept taking bets from Utahns anyway."

Kalshi officials responded to the criminal charges by calling them "a crazy overreach" and accused state officials of "playing politics."

Kalshi is facing lawsuits from other states, such as New York , but those involve Kalshi allegedly failing to comply with online gambling rules or failing to fulfill tax obligations , Isaac Rose-Berman, a gambling policy fellow at the American Institute for Boys and Men, told Salt Lake City’s ABC affiliate.

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