Utah AG sues Kalshi and seeks up to $60 million from prediction market profits

Utah Attorney General Derek Brown has filed a lawsuit against Kalshi, its affiliates and two Susquehanna trading companies, accusing the prediction market platform of facilitating illegal betting in the state since 2024. For anyone watching high-risk payments, the point is simple: state gambling enforcement is now reaching into event-contract models that sit awkwardly between derivatives regulation and betting law.

1. Brown said Utah officials asked the court to compel the companies to return about $30 million to $60 million in profits allegedly earned through illegal event contracts. The state also said Kalshi illegally offered its services to more than 32,000 users in Utah, causing significant losses.
2. In Brown’s words, “Under Utah law, I have determined that this operation is causing a significant and substantial ongoing harm to a significant number of Utahns.” He also said the state is asking the court to stop “sports, elections, politics, culture and mention bets here in Utah.”
3. Kalshi sued Utah in February after lawmakers passed a bill treating betting on prediction markets as gambling under state law. In August, a judge sided with Utah officials and said federal laws under the US Commodity Futures Trading Commission (CFTC) do not preempt state gambling laws.
4. In September, an appellate court denied Kalshi’s request for an injunction, blocking the platform from operating while the appeal proceeds. Kalshi did not provide an immediate response to Cointelegraph’s request for comment on the new lawsuit.
5. The Utah case is one of several civil actions brought by US state authorities against prediction market platforms such as Kalshi and Polymarket over alleged violations of state gambling laws, many tied to sports betting. Arizona remains the only state pursuing criminal charges against Kalshi, while Michigan, Ohio, Kentucky, Nevada, Massachusetts, Wisconsin and New York have filed civil suits against one or more prediction market companies.

The broader legal backdrop is still moving. The US Supreme Court is considering whether to take up New Jersey’s case against Kalshi over allegedly illegal sports bets, which could clarify whether prediction market companies fall under state authority or under the CFTC, which claims “exclusive jurisdiction” over the platforms’ event contracts.