Utah’s escalating legal dispute with prediction market operator Kalshi has prompted DraftKings, FanDuel and Fanatics to restrict their operations in the state. The three sportsbook-backed platforms are withdrawing event contracts following criminal charges filed against Kalshi and its co-founders by Utah Attorney General Derek Brown.
DraftKings removed sports, political and novelty contracts from its platform for Utah customers on Wednesday, October 28. FanDuel followed on Friday, ending access to comparable markets at 10 a.m. ET. Fanatics Markets will take a broader approach, stopping all trade placement in Utah on November 4.
The decisions come amid competing legal actions involving Utah, Kalshi and the Commodity Futures Trading Commission (CFTC). While the state is pursuing criminal proceedings against the prediction market company, the federal regulator is challenging Utah’s authority to restrict contracts it considers subject to federal oversight.
The withdrawals also demonstrate the different approaches emerging among companies operating in the prediction market sector as state and federal authorities dispute who has jurisdiction over sports-related event contracts.
Sportsbook-backed platforms restrict Utah offerings
DraftKings became the first of the three operators to remove certain prediction contracts from Utah on October 28. The company informed customers that its platform would continue supporting financial markets while suspending contracts connected to sports, politics and novelty events.
In a statement DraftKings said:
“Effective immediately, sports, novelty, political, and certain other event contracts are no longer available on DraftKings Predictions for customers physically located in Utah. Customers are still able to trade financial event contracts, including those related to stocks, commodities, and cryptocurrency. Any open positions customers hold in the affected markets will remain open and settle as normal. DraftKings remains committed to operating responsibly and transparently”
The company confirmed that existing positions in the affected categories would remain active until their scheduled settlement. Its decision followed the announcement of criminal charges against Kalshi and its founders.
FanDuel introduced comparable restrictions on Friday. Its Predicts platform stopped offering sports, political and novelty contracts to customers located in Utah, while retaining access to financial products linked to economic benchmarks and other indicators.
A company spokesperson told InGame that customers would remain “able to trade on economic benchmarks and key financial indicators” though contracts on “sports, politics, and novelties are no longer available.”
FanDuel also confirmed that existing customer positions would remain open and settle as expected.
Fanatics Markets has selected a more extensive withdrawal. The company announced that it would stop accepting trades across its platform in Utah from November 4, effectively removing its entire prediction market offering from the state.
“Due to recent developments, we are stopping trade placement on Fanatics Markets in the state of Utah on November 4,” a company spokesperson said.
Unlike DraftKings and FanDuel, which have retained financial event contracts, Fanatics will discontinue its full range of trading activity in Utah.
Attorney General Brown welcomed the companies’ decisions, highlighting their responsiveness to the state’s enforcement efforts. In a post on X, he reiterated Utah’s position on gambling restrictions.
“Gambling is illegal in Utah, whether you place the bet, run the game, or promote it,” Brown stated. “Calling it a ‘prediction market’ doesn’t change what it is, and being federally registered doesn’t put a company above the law.”
Criminal proceedings against Kalshi intensify
The operators’ decisions followed criminal charges filed by Brown’s office against Kalshi and co-founders Tarek Mansour and Luana Lopes Lara on Wednesday.
Each founder faces 14 counts, including a second-degree felony charge alleging a pattern of unlawful activity, 12 third-degree felony counts involving online gambling promotion and another third-degree felony count related to general gambling promotion.
The case follows an undercover investigation conducted by the Utah Attorney General’s Office. According to the charging documents, investigator Scott Eggerman used a Utah-based IP address to register a Kalshi account and place 12 sports event contract trades during September.
The transactions covered sporting events involving NFL, MLB, MLS, NHL and NCAA men’s football competitions. The investigator placed the contracts while in Salt Lake County and Davis County between September 13 and September 26, 2026.
Utah authorities allege that Kalshi collected transaction fees and received an economic benefit from facilitating the trades.
The charges followed an October 20 civil lawsuit brought by the Attorney General’s Office seeking to prevent Kalshi from offering event contracts in the state and recover profits allegedly generated through unlawful gambling activity.
Kalshi rejected the criminal allegations. A company spokesperson described the proceedings as “a crazy overreach.” Utah is among only two US states without any legalized form of gambling. Its restrictions have therefore created a particular challenge for prediction market operators seeking to offer sports-related contracts to local customers.
The state’s position has also received support from other jurisdictions. On Wednesday, a bipartisan coalition representing 37 states and Washington, D.C., submitted an amicus brief to the 10th US Circuit Court of Appeals. The filing urged the court to uphold an August decision allowing Utah to enforce its gambling laws against Kalshi.
US District Judge Robert Shelby had previously rejected Kalshi’s argument that federal legislation preempts Utah’s gambling restrictions. The appeals court subsequently declined to suspend enforcement while the company’s appeal proceeds.
CFTC challenges Utah’s authority as dispute expands
The federal government has entered the dispute through a separate lawsuit filed by the CFTC on Monday. The regulator argues that the Commodity Exchange Act grants it exclusive jurisdiction over federally regulated event contracts, meaning state gambling restrictions cannot automatically apply to those products.
CFTC Chair Michael Selig reiterated the agency’s intention to pursue the matter through the courts, including potentially taking the case to the US Supreme Court.
Utah is the second state, following Arizona, to bring criminal charges against Kalshi. The CFTC’s intervention has complicated the state’s efforts, with its earlier lawsuit against Arizona also forming part of the wider federal challenge to state-level restrictions.
The broader disagreement extends beyond Utah. More than a dozen states have challenged prediction market operators over sports event contracts, raising questions about whether these products fall under federal commodities regulation or state gambling legislation. Federal appeals courts have reached conflicting conclusions, prompting several parties to seek Supreme Court intervention.