Utah Files Felony Charges Against Kalshi and Co‑founders on Oct 28, 2026

Utah prosecutors filed criminal charges on 28 October 2026 against Kalshi and its co‑founders, Tarek Mansour and Luana Lopes Lara, alleging the prediction market operator violated Utah gambling laws by offering sports event contracts to state residents. The charging documents list 14 criminal counts against KalshiEx LLC and name Mansour and Lopes Lara as co‑defendants; summonses were issued for both executives to appear in court.

Charges and statutory penalties

The indictment includes one count of pattern of unlawful activity, a second‑degree felony; 12 third‑degree felony counts of online gambling promotion; and one class A misdemeanor count of gambling promotion. Under Utah law, a second‑degree felony carries a potential prison sentence of one to 15 years, and each third‑degree felony is punishable by up to five years. The state’s pattern‑of‑unlawful‑activity statute also permits courts to impose fines tied to the proceeds of illegal activity.

Undercover investigation and specific trades

The charges stem from an undercover probe by the Utah Attorney General’s Office. According to the probable cause affidavit obtained by FOX 13 News, investigator Scott Eggerman opened a Kalshi account in September using a Utah IP address, a Utah residential address, a Utah phone number and a Utah bank account before placing trades across multiple sports.

Eggerman placed 12 trades in Salt Lake and Davis counties on contracts covering NFL and college football games, Major League Baseball, hockey and soccer. The affidavit cites a $10 position on the Dallas Cowboys defeating the New York Giants for which Kalshi allegedly collected a $0.44 transaction fee, and a $5 trade on Utah defeating Utah State by more than 27.5 points for which Kalshi allegedly collected a $0.16 fee. Prosecutors say the fees Kalshi collected from those transactions constituted proceeds of illegal gambling activity.

Company and state responses, and parallel federal action

Prosecutors rely in part on public statements by Tarek Mansour, Kalshi’s chief executive officer, and Luana Lopes Lara, its chief operating officer, to allege both executives exercised control over an enterprise engaged in unlawful activity.

"Kalshi called the charges 'a crazy overreach'," the company said in a statement to FOX 13 News.

Utah Attorney General Derek Brown defended the criminal filing, telling FOX 13 News that Kalshi’s federal registration does not exempt it from state gambling laws and noting an earlier federal court ruling had denied Kalshi’s request to block Utah from enforcing those laws.

The criminal case is the latest escalation in litigation over state authority and federally regulated exchanges. Two days before Utah filed charges, the Commodity Futures Trading Commission and the US Department of Justice sued the State of Utah to block enforcement actions against federally regulated exchanges. Eight days earlier, Utah had filed a separate civil lawsuit against Kalshi. Arizona previously brought 20 misdemeanor charges against Kalshi in March; a federal judge in that matter granted a preliminary injunction in May at the request of the CFTC and the federal government.

Next steps

Mansour and Lopes Lara have been issued summonses to appear in Utah courts. Kalshi has said it intends to challenge the prosecution in court as it did in Arizona. The dispute now involves state criminal charges, state civil litigation and federal intervention from the CFTC and the US Department of Justice. For coverage of the regulatory angle see regulation and for industry reaction see news.