Utah AG sues Kalshi, pursues profits from prediction market company

Derek Brown likened the prediction market company to a “public nuisance“ that was “causing a significant and substantial ongoing harm“ to state residents. Update (Oct. 20, 9:53 pm UTC): This article has been updated to include a statement from Kalshi. Utah Attorney General Derek Brown announced a lawsuit against Kalshi, its affiliates and two Susquehanna trading companies, alleging that the prediction markets platform had been facilitating illegal betting in the US state since 2024. In a Tuesday press briefing, Brown said Utah officials had >petitioned a court to compel the companies to return about $30 million to $60 million in profits they made through allegedly illegal event contracts. The Utah attorney general alleged that Kalshi illegally offered its services to more than 32,000 users in the state, resulting in significant losses. “Under Utah law, I have determined that this operation is causing a significant and substantial ongoing harm to a significant number of Utahns,” said Brown. “And so today, we are asking the court to stop sports, elections, politics, culture and mention bets here in Utah.” Kalshi sued Utah in February after lawmakers passed a bill on betting on prediction markets as gambling under state law. In August, a judge ruled in favor of Utah officials, saying federal laws under the US Commodity Futures Trading Commission (CFTC) do not preempt state gambling laws. An appellate court also denied Kalshi’s request for an injunction in September, blocking the platform from operating during its appeal. “Kalshi is a federally regulated financial exchange, like the stock market,“ Kalshi spokesperson Jacki McGavick told Cointelegraph in response to the Utah lawsuit. “Our customers trade with each other and set the prices. As a national derivatives market overseen by the CFTC, Kalshi answers to federal law, and no single state should have a veto over it. This latest state court action does not affect our ongoing federal litigation.“ Related: NFL backs New Jersey authorities in SCOTUS petition over Kalshi The civil lawsuit is one of many filed by US state authorities against prediction market platforms like Kalshi and Polymarket over alleged violations of state gambling laws, many involving sports betting. Officials in Arizona remain the only ones in the US pursuing criminal charges against Kalshi, but other states, including Michigan, Ohio, Kentucky, Nevada, Massachusetts, Wisconsin and New York, have filed civil suit