CFTC Asks Judge to Block Utah’s Case Against Kalshi Over Prediction Markets

The Commodity Futures Trading Commission asked a federal judge to halt Utah’s week‑old enforcement action against Kalshi, arguing the Commodity Exchange Act preempts state law. The agency announced the suit on Tuesday and says its complaint was filed Monday in federal court in Utah, listing the United States and the CFTC as plaintiffs and the State of Utah and Attorney General Derek Brown as defendants.

Federal preemption bid and requested relief

The CFTC’s legal theory is preemption: the complaint argues the Commodity Exchange Act overrides Utah’s gambling, election‑betting and public nuisance laws whenever they reach event contracts on CFTC‑registered exchanges. The agency asks the court for a declaratory judgment and a preliminary, then permanent, injunction stopping both the Kalshi action and any future enforcement or investigations aimed at federally regulated exchanges.

"Utah seeks to shut down prediction markets across a wide variety of markets," CFTC Chairman Michael Selig said in the agency release.

Utah’s suit against Kalshi began on October 20, when Attorney General Derek Brown’s office sued Kalshi in the Third Judicial District Court in Salt Lake County, alleging the platform lets residents bet on sports, elections and politics in violation of state law. The federal complaint notes the state case also names two Susquehanna entities and seeks restitution, disgorgement and punitive damages among other relief. Brown previously said, "Kalshi runs an online casino in Utah and calls it a prediction market."

Broader litigation and other states

The CFTC told the court it has "initiated legal proceedings against nine other states and has submitted briefs in four federal courts of appeal and one state supreme court." The agency says courts have entered preliminary injunctions for the federal government in Arizona, Illinois and Minnesota.

The complaint lists the other six states where the CFTC is active as Connecticut, Kentucky, New Mexico, New York, Rhode Island and Wisconsin. In Rhode Island the CFTC moved to intervene in Kalshi’s case. The agency also sued Minnesota in May over a law that would make running a prediction market a felony.

Platforms have pursued their own litigation. Polymarket sued Ohio in federal court on October 16, citing new CFTC rules.

The CFTC frames its challenge as protecting the federal regulatory regime for event contracts and preventing state enforcement that would reach CFTC‑registered exchanges. The Utah action against Kalshi remains pending in state court as the CFTC asks the federal court to step in. For reporting on regulatory developments see the regulation section and related coverage in news.