The state of Utah in the US has filed 14 criminal charges against Kalshi and its co-founders, accusing the company of violating state gambling laws by allowing users to wager on sporting events.
The charges, announced Wednesday, October 28, include 13 felony counts against the prediction market platform and its founders Tarek Mansour and Luana Lopes Lara, according to documents filed by the Utah Attorney General’s Office.
The case adds to an escalating legal dispute over whether prediction markets should be regulated as financial products or treated as gambling under state law.
They Went Undercover
The investigation included an undercover operation in which an agent for the attorney general opened a Kalshi account using a Utah address, phone number, and a locally issued debit card.
After confirming the account’s location through location services, the agent placed 12 wagers on sporting events over approximately two weeks.
The wagers totaled $114.87, with the agent losing $25.10, according to the charging documents.
The bets covered a range of events, including NFL games, college football, Major League Baseball, Major League Soccer, and an NHL matchup between the Utah Mammoth and the Colorado Avalanche.
The agent managed to correctly predict half of the outcomes. The list of successful wagers included predictions involving the Utah Utes’ margin of victory against Utah State, Atlanta Falcons quarterback Michael Penix Jr.’s passing yards, and the total points scored in an NFL game between the Philadelphia Eagles and Tennessee Titans.
Each of the 12 wagers forms the basis of an online gambling promotion charge, described in the filing as a third-degree felony under Utah law. The charges also include allegations of a pattern of unlawful activity and general gambling promotion, which is deemed a misdemeanor in the state.
No arrest warrants were issued for Mansour or Lopes Lara. Instead, both were summoned to respond to the charges in Utah’s Third District Court in Salt Lake County.
A Long Battle
Kalshi and Utah have already been involved in a broader legal battle over the platform’s operations. Utah Attorney General Derek Brown and Governor Spencer Cox have argued that sports-related prediction markets amount to illegal gambling under state law.
The dispute has also drawn federal regulators into the case. On Tuesday, October 27, the Commodity Futures Trading Commission filed a lawsuit against Utah, seeking to stop the state’s civil action against Kalshi and its investigation of the platform.
The federal agency argues that it has regulatory authority over prediction markets and that federal law takes precedence over conflicting state gambling restrictions.
The competing legal actions leave the future of sports-related prediction markets in Utah uncertain, with the state and federal authorities advancing opposing views on which rules should govern the industry.