CFTC sues the state of Utah over its actions against prediction markets
Federal regulator challenges Utah’s civil measures after rulings against Kalshi
Key Takeaways
- The CFTC sued the state of Utah on October 27, 2026, to stop civil measures against prediction markets registered with the agency.
- A Utah court awarded $61.2 million in damages against Kalshi on October 20, 2026, plus other monetary and injunctive relief.
- In August 2026 Judge Robert Shelby rejected Kalshi’s preemption argument, and Kalshi appealed to the Tenth Circuit.
- The CFTC has also filed suits against nine other states and submitted briefs in multiple federal courts and a state supreme court to defend its jurisdiction.
The Commodity Futures Trading Commission filed a lawsuit against the state of Utah on October 27, 2026, after Utah brought civil actions against prediction markets that are registered with the CFTC at the federal level. The agency says Utah’s measures constrain the activities of federally registered exchanges and conflict with the authority Congress granted the regulator over commodity derivatives.
Reasons for the suit and statements
The CFTC argues federal law preempts state bans that block the operation of registered derivatives exchanges. CFTC Chairman Michael S. Selig said:
"Congress entrusted the CFTC to be the federal regulator with sole responsibility to oversee these markets."
In the same filing the agency says it will defend its authority to govern federal futures markets and that event contracts provide information about future outcomes in addition to hedging and speculative functions.
Judicial context and related cases
The CFTC’s suit responds to a string of legal battles between the agency and states seeking to regulate prediction markets. Utah sued Kalshi; on October 20, 2026 the Third District Court of Utah awarded $61.2 million in damages against Kalshi, along with other monetary and injunctive relief tied to its trading of event contracts.
That ruling follows an August 2026 decision by Judge Robert Shelby of the United States District Court, who rejected Kalshi’s argument that federal commodities regulation preempts Utah gambling laws. After that rejection, Kalshi appealed to the US Court of Appeals for the Tenth Circuit.
National scope of the dispute
In its October 27 statement the CFTC said that, in addition to suing the state of Utah, it has filed suits against nine other states and submitted briefs in four federal courts and one state supreme court to press its jurisdiction over registered prediction markets. State regulators maintain that certain contracts, especially those tied to sports, resemble sports betting and should fall under state licensing and gaming rules. For more on regulatory issues see [regulation](/regulation).
What the CFTC seeks
The agency seeks protection of its exclusive jurisdiction over registered derivatives and asks courts to stop state actions that, it says, prevent federally registered exchanges from operating under federal law. Michael S. Selig reiterated in the filing:
"The CFTC has the expertise and responsibility to defend its exclusive jurisdiction over commodity derivatives, and that’s exactly what we’ll do."
The legal fight between the CFTC and several states will continue in federal and state courts as appeals and parallel suits move forward; the dispute has immediate implications for platforms operating event contracts and for how states treat such products in relation to sports and gaming markets. See ongoing coverage in [news](/news) and market implications for [sports](/sports).
Frequently Asked Questions
What did the CFTC file against Utah and when?
The CFTC filed a civil lawsuit against the state of Utah on October 27, 2026, alleging that Utah’s civil enforcement actions unlawfully restrict federally registered derivatives exchanges and exceed state authority over those markets.
What penalty did Kalshi receive in Utah recently?
On October 20, 2026, the Third District Court of Utah awarded $61.2 million in damages against Kalshi and imposed additional monetary and injunctive measures related to its trading of event contracts.
What earlier decision by Judge Robert Shelby affects this case?
In August 2026 Judge Robert Shelby of the United States District Court rejected Kalshi’s argument that federal commodities regulation preempts Utah gambling laws, a ruling that allowed Utah’s enforcement to proceed and which Kalshi has appealed.
What other legal steps has the CFTC taken nationally?
The CFTC said on October 27 that it has filed suits against nine additional states and submitted briefs in four federal courts and one state supreme court to assert its jurisdiction over registered prediction markets.
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About the author
Renata Quiroga
Betting Markets Correspondent
Renata Quiroga covers sports betting and prediction markets — sportsbook launches, odds technology, event contracts, and the regulatory calls that decide what can be bet on and where. The reports open with the product or the ruling, name operators and platforms precisely, and explain the mechanics without needless jargon. When a book enters a Latin American market or a prediction exchange lists a contested contract, Renata Quiroga reports what changes for the bettor.
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