Utah AG sues Kalshi, pursues profits from prediction market company

During a press briefing on Tuesday, Attorney General Brown revealed that Utah officials have officially petitioned a state court to compel the targeted companies to disgorge an estimated $30 million to $60 million in profits. According to the state’s legal filing, these revenues were generated through event contracts that state authorities classify as unlawful wagering. The Utah attorney general further alleged that Kalshi illicitly extended its services to more than 32,000 users residing within the state, resulting in significant financial losses for local participants.

"Under Utah law, I have determined that this operation is causing a significant and substantial ongoing harm to a significant number of Utahns," Attorney General Brown stated during the briefing. "And so today, we are asking the court to stop sports, elections, politics, culture, and mention bets here in Utah."

The legal confrontation between Utah and the prediction markets platform is the culmination of months of escalating tensions. Kalshi initially filed a lawsuit against Utah in February following the passage of state legislation that formally classifies prediction market betting as gambling under local law. The conflict intensified in August when a state judge ruled in favor of Utah officials, concluding that federal statutes overseen by the U.S. Commodity Futures Trading Commission do not preempt state-level gambling regulations. Shortly thereafter, in September, an appellate court denied Kalshi’s request for a preliminary injunction, effectively blocking the platform from offering its services in the state while its legal appeal proceeds.

In response to the newly announced civil lawsuit, Kalshi pushed back against the state’s characterization of its operations, maintaining that its platform functions as a legitimate, federally overseen financial institution.

"Kalshi is a federally regulated financial exchange, like the stock market," Kalshi spokesperson Jacki McGavick said in a statement provided to Cointelegraph. "Our customers trade with each other and set the prices. As a national derivatives market overseen by the CFTC, Kalshi answers to federal law, and no single state should have a veto over it. This latest state court action does not affect our ongoing federal litigation."

Ongoing legal battles across the US

The civil lawsuit brought forward by Utah authorities is far from an isolated incident, representing just one front in a widening national clash between state regulators and prediction market platforms. Across the United States, various state authorities have initiated legal actions against platforms like Kalshi and Polymarket over alleged violations of state gambling statutes, with a substantial portion of these disputes centering on unauthorized sports betting products.

While civil litigation has become the primary tool for state regulators seeking to curb the expansion of these platforms, the enforcement landscape varies significantly by jurisdiction. Officials in Arizona currently stand out as the only state authorities pursuing criminal charges against Kalshi. Meanwhile, a growing roster of states—including Michigan, Ohio, Kentucky, Nevada, Massachusetts, Wisconsin, and New York—have pursued civil lawsuits against one or more prediction market companies, signaling a coordinated regional pushback against the rapid growth of event-contract trading.

The legal pressure facing Kalshi in Utah coincides with a pivotal moment for the industry at the national level. The U.S. Supreme Court is currently considering whether to accept a petition to intervene in a parallel legal battle between New Jersey authorities and Kalshi concerning allegedly illegal sports wagers. Should the nation’s highest court agree to hear the case, the resulting decision could establish a definitive precedent regarding whether the oversight of prediction market companies rests primarily with state regulatory bodies or belongs exclusively under the jurisdiction of the CFTC, which maintains that it holds exclusive regulatory authority over the platforms’ event contracts.