Utah sues Kalshi and Susquehanna entities over online betting commissions
Civil suit seeks up to $61.2M and a state access block; filed 20 Oct.
Key Takeaways
- Attorney General Derek Brown filed the suit on 20 October in the Third Judicial District Court in Salt Lake County.
- Utah seeks between $30.6 million and $61.2 million in commissions it alleges Kalshi charged to Utah accounts.
- The complaint names Susquehanna entities for acting as market maker counterparties and benefiting from local wagers.
- Kalshi contends its contracts are regulated by the Commodity Futures Trading Commission, raising a federal‑preemption dispute.
Utah filed a civil lawsuit on 20 October seeking to recover between $30.6 million and $61.2 million in commissions that the state alleges Kalshi charged to Utah accounts. Attorney General Derek Brown accuses Kalshi and Susquehanna entities of operating unlawful online wagering and asks for customer loss restitution, disgorgement of alleged ill-gotten gains and an order to cease the activity within the state.
What Utah seeks
The action was filed in the Third Judicial District Court in Salt Lake County. In addition to monetary relief, Utah requests third‑party geolocation controls to block access from state territory. The complaint targets not only the prediction markets operator Kalshi but also firms that took the counter‑party side of customers’ trades.
Utah alleges Susquehanna benefited from wagers placed by residents and that its role as a market maker is part of the enforcement case.
Arguments from the parties and the federal‑preemption question
Kalshi maintains that its event contracts on sporting outcomes are regulated by the [CFTC regulation](/regulation) and not by state sports‑betting laws. Utah invokes the state constitutional prohibition on gambling. The central legal question is whether federal commodities regulation prevents Utah from applying its gaming restrictions to those contracts. The complaint states:
"KalshiEx participates in the same manner as the manager of an illegal gambling house (or a gaming parlor): hosting and facilitating gaming events and taking a percentage (or 'rake') of the amounts wagered."
Kalshi initiated its own federal challenge in February. A judge ruled for Utah in August and the Tenth Circuit denied emergency relief in September while Kalshi continued its appeal.
Procedural status and remedies sought
Utah seeks, in addition to recovery of $30.6 million to $61.2 million, a judicial order to stop the described activity and implementation of geolocation blocking controls. The dispute raises the federal‑preemption question between the CFTC and state gambling laws.
By Miguel Sandoval, Corresponsal de regulación.
Frequently Asked Questions
How much is Utah seeking in the lawsuit against Kalshi?
Utah is seeking between $30.6 million and $61.2 million in commissions that the complaint alleges Kalshi charged to state accounts; those figures are the estimated recovery the state seeks.
Who filed the suit and where was it filed?
The suit was filed by Attorney General Derek Brown on 20 October in the Third Judicial District Court in Salt Lake County; the complaint seeks monetary relief and injunctive measures to stop the activity in Utah.
Why is Susquehanna named in the complaint?
Utah alleges that Susquehanna entities profited from wagers placed by residents and that their role as market makers—taking the opposite side of customer positions—made them part of the enforcement case.
What legal argument does Kalshi raise against the state action?
Kalshi argues that its event contracts fall under Commodity Futures Trading Commission regulation rather than state gaming laws, presenting a federal‑preemption issue that Kalshi has already litigated in federal court.
What is the procedural history prior to this civil suit?
Kalshi filed a federal challenge in February; a judge ruled for Utah in August and the Tenth Circuit denied emergency relief in September while Kalshi proceeded with its appeal.
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About the author
Miguel Sandoval
Regulatory Affairs Correspondent
Miguel Sandoval tracks gambling legislation, licensing, and regulator enforcement — from Spain's DGOJ and the Latin American authorities to the UKGC, the MGA, and the state-by-state map in North America. The reports answer three questions precisely — what changed, where, and who it affects — with jurisdictions, dates, and penalties cited exactly as published. Operators and compliance officers read Miguel Sandoval to know which rulebook moved before their next meeting.
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