Utah Files Civil Suit Against Kalshi and Susquehanna Seeking Up to $61.2M
Attorney General Derek Brown asks for restitution, profits and an injunction in Salt Lake County.
Key Takeaways
- Attorney General Derek Brown filed the suit on October 20 in the Third Judicial District Court in Salt Lake County.
- Utah seeks recovery of an estimated $30.6 million to $61.2 million in fees allegedly collected by Kalshi.
- The complaint names Susquehanna entities, alleging they profited as market makers from wagers placed by Utah residents.
- Utah requests restitution, recovery of unlawful profits, an injunction and third-party geolocation checks.
- Kalshi argues CFTC registration preempts state gambling law; a judge ruled for Utah in August and the Tenth Circuit denied emergency protection in September.
Utah Attorney General Derek Brown filed a civil lawsuit on October 20 seeking recovery of an estimated $30.6 million to $61.2 million in fees that Kalshi allegedly collected from state accounts. The complaint names Kalshi and Susquehanna entities, asks for repayment of customer losses, recovery of alleged unlawful profits and an order stopping the disputed activity within Utah.
Relief sought and court filing
Brown lodged the action in the Third Judicial District Court in Salt Lake County. The state asks the court for financial relief covering customer restitution and Kalshi's alleged fees, and it requests an injunction preventing the companies from continuing the activity inside the state. Utah also wants third-party geolocation checks to block in-state access.
Defendants and the market-maker allegation
The complaint reaches beyond Kalshi, the prediction market operator, to include companies that took the other side of customer trades. Utah alleges that Susquehanna profits from wagers placed by Utah residents and that its market-making role forms part of the enforcement case.
Federal-registration and preemption dispute
Kalshi argues its sports-event contracts fall under the Commodity Futures Trading Commission rather than state gambling laws and that federal derivatives regulation overrides state restrictions. Utah responds that its constitution prohibits gambling and that federal registration does not resolve whether commodities law preempts Utah enforcement.
“KalshiEx participates in the same way the manager of a back-alley gambling den (or cardroom) participates in gambling: by hosting and facilitating the gambling events and by taking a percentage fee (or ‘rake’) of amounts gambled,” the complaint states.
Kalshi began its own federal challenge in February. A judge ruled for Utah in August, and the Tenth Circuit denied emergency protection in September while Kalshi pursued its appeal.
For regulatory readers, the case raises a federal preemption question around CFTC registration and state gambling prohibitions; Utah’s remedies include financial recovery, injunctive relief and geolocation requirements. Relevant reporting on legal and market implications appears in our regulation and sports sections.
Frequently Asked Questions
What amount is Utah seeking from Kalshi in the lawsuit?
Utah is seeking recovery of an estimated $30.6 million to $61.2 million in fees that Kalshi allegedly collected from state accounts. That figure appears in the civil complaint filed by Attorney General Derek Brown on October 20.
Why is Susquehanna named in the complaint?
Utah alleges Susquehanna profited from wagers placed by Utah residents and that its market-making activity makes it part of the enforcement case. The state says companies taking the other side of customer trades are included in the action.
Where was the lawsuit filed and what relief does Utah want?
The action was filed in the Third Judicial District Court in Salt Lake County on October 20. Utah requests restitution of customer losses, recovery of alleged unlawful profits, an injunction stopping the activity in the state and third-party geolocation checks to block access.
What is Kalshi’s legal argument against Utah’s claims?
Kalshi maintains its sports-event contracts fall under the Commodity Futures Trading Commission rather than state sports betting rules and argues federal derivatives regulation overrides state gambling laws. Kalshi began a federal challenge in February.
What procedural rulings preceded this filing?
A judge ruled for Utah in August, and the Tenth Circuit denied Kalshi emergency protection in September while Kalshi pursued its appeal. Those rulings are noted in the complaint and related filings.
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About the author
Eleanor Whitfield
Regulatory Affairs Correspondent
Eleanor Whitfield tracks gambling legislation, licensing decisions, and regulator enforcement across key markets — from the UKGC, MGA, and Germany's GGL to Spain's DGOJ and the state-by-state map in the Americas. The reporting answers three questions precisely: what changed, where, and who it affects, with jurisdictions, effective dates, and penalty figures named exactly as published. Compliance officers and operators read Eleanor Whitfield to know which rulebook moved before their next board meeting.
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