Utah is once again going after Kalshi, alleging that the company and its affiliate, as well as two Susquehanna trading firms, have breached the state’s gambling laws and inflicted damages of up to $61.2 million.
Utah Once Again on the Offensive Against Prediction Markets
This is the specific number Utah claims the defendants need to pay in restitution and other financial remedies to the state in a new complaint filed on Tuesday, October 20, at Utah’s Third District Court by state attorney general Derek Brown.
Brown’s complaint seeks to block Kalshi from providing event contracts on sports, politics, elections, and culture, as well as enact georestrictions and the recovery of profits allegedly obtained through unlawful transactions.
The AG’s office argues that Kalshi has illegally generated between $30.6 million and $61.2 million in fees from Utah accounts, on a total volume of $3 billion in trades placed. According to the complaint, at least 32,000 Utah users have used Kalshi to place trades with the platform.
The complaint further stipulates that Kalshi began offering its markets by September 2024, even though the AG’s office claims the company knew that they are not legal under state laws. Brown has said that Utah has been firmly opposed to gambling since its statehood in 1896, and that has not changed.
Naturally, Kalshi has batted down the criticism and argued that Utah’s interpretation of the law was not just.
“Kalshi is a federally regulated financial exchange, like the stock market. 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,” a company spokesperson said.
State Only Chooses Civil Proceedings – For Now
Kalshi has been trying to push back against Utah but unsuccessfully so far, following a lawsuit filed in February. In August, US District Judge Robert Shelby said that Kalshi’s argument had not convinced the court and granted summary judgment to the state. Kalshi has since appealed to the Tenth Circuit Court of Appeals, but a decision has not been reached.
Brown has not said whether his office intends to pursue criminal investigations or launch proceedings. The AG stated that the office expected prediction markets to comply with gambling laws, and hinted that “this is part of a larger investigation.”