Utah Attorney General Derek Brown filed a civil complaint against Kalshi and two Susquehanna trading firms on October 20, 2026. The lawsuit claims the prediction market platform ran an illegal gambling operation in the state and asks a court to block its sports, elections, politics, culture and mention-based products for Utah users. Brown also wants the defendants to return an estimated $30 million to $60 million in allegedly unlawful earnings. At issue is whether federal derivatives law can supersede Utah’s gambling statutes.
Allegations and Account Figures
Brown’s 63-page complaint says Kalshi has been operating without state authorization since 2024, reaching more than 32,000 people in Utah. Gambling Insider reported that the state counted 32,940 accounts with Utah addresses as of February 2026. Brown puts the fee total from those accounts at $30.6 million to $61.2 million, with estimated bettor losses around $5.5 million. He called the situation “significant and substantial ongoing harm” to residents. In a statement, Brown said, “Kalshi runs an online casino in Utah and calls it a prediction market. That violates Utah law.” The complaint compares Kalshi to the manager of an unlicensed cardroom, while the Susquehanna firms are likened to professional poker players accepting wagers.
Relief Utah Wants
Brown is asking the court to issue preliminary and permanent orders that would prevent Kalshi from offering contracts tied to sports, elections, politics, culture and mentions inside Utah. Enforcement would rely on a third-party geolocation provider, according to Gambling Insider. The state also seeks restitution, damages and disgorgement of profits, along with public nuisance and civil conspiracy claims. The $30 million to $60 million figure is not a damages award; it is the state’s estimate of money that should be returned.
Earlier Court Decisions
Kalshi initiated its own lawsuit against Utah in February 2026, shortly after state lawmakers passed a bill treating prediction-market wagering as gambling. In August, U.S. District Judge Robert Shelby ruled for Utah, deciding the Commodity Exchange Act does not preempt state gambling laws. A Tenth Circuit panel declined Kalshi’s request for an emergency injunction in September, leaving the platform blocked during the appeal. Kalshi says the new civil action is separate from that federal appeal, and the operator is expected to try to transfer the latest case to federal court.
Kalshi’s Federal Argument
Spokesperson Jacki McGavick described the company as a federally regulated financial exchange supervised by the Commodity Futures Trading Commission. She said, “Our customers trade with each other and set the prices.” McGavick argued that Kalshi answers to federal law and that no individual state should have a veto over a national derivatives market. In related court fights, the CFTC has asserted “exclusive jurisdiction” over event contracts, as Bitcoin Foundation News reported.
State and Supreme Court Context
If the court grants the injunction, Utah would join Nevada, Michigan and Washington, where prior rulings have already required Kalshi to restrict some event contracts. Arizona is pursuing criminal charges against Kalshi, making it the only state doing so; Utah’s lawsuit is civil. In Michigan, an extended sports market ban could expose Kalshi to a $500,000-a-day fine, according to Bitcoin Foundation News. The next major federal question is whether the U.S. Supreme Court will take up New Jersey’s dispute with Kalshi; that case could decide the split between states and the CFTC.
