Utah attorney general sues Kalshi over alleged illegal betting, seeks $30–$60M

The office of the Utah Attorney General filed a civil lawsuit against Kalshi, its affiliates and two Susquehanna trading firms, alleging the prediction markets platform facilitated illegal betting in Utah since 2024 and seeking the return of $30 million to $60 million in proceeds. Attorney General Derek Brown announced the action at a press conference on Tuesday; the item was updated on 20 October at 21:53 UTC to include a statement from Kalshi.

Allegations and restitution sought

Derek Brown said the companies offered services to more than 32,000 users in Utah and that the operation “is causing a significant and substantial ongoing harm to a significant number of Utahns.” In the court filing, Utah asked a judge to order the approximate return of $30 million to $60 million in proceeds from event contracts that the state classifies as illegal wagers.

Procedural posture and appeals

Kalshi sued the state of Utah in February after a state law treated wagering in prediction markets as gambling. In August, a judge ruled for Utah officials, finding that federal statutes overseen by the Commodity Futures Trading Commission (CFTC) do not preempt state gambling laws. An appeals court in September denied Kalshi’s request for an injunction that would have allowed it to continue operating while the appeal proceeds.

Kalshi replied to Cointelegraph through spokesperson Jacki McGavick: “Kalshi is a federally regulated financial exchange, like the stock market. Our customers trade with each other and set prices. As a national derivatives market supervised by the CFTC, Kalshi answers to federal law, and no individual state should have a veto over that. This latest state-court action does not affect our ongoing federal litigation.”

National context

The civil suit in Utah is part of a wave of state political and legal actions against prediction market platforms, including Kalshi and Polymarket. Arizona is the only state pursuing criminal charges against Kalshi; other states that have filed civil suits include Michigan, Ohio, Kentucky, Nevada, Massachusetts, Wisconsin and New York. The US Supreme Court is also considering whether to take a petition related to New Jersey’s case against Kalshi, a possible decision that could determine whether jurisdiction lies with the states or the CFTC.

“Under Utah law, I have determined that this operation is causing a significant and substantial ongoing harm to a significant number of Utahns,” Derek Brown said at the press conference.

This story was originally published on 20 October 2026 at 21:19:15 UTC and was updated at 21:53 UTC with Kalshi’s response.