Utah files new state complaint against Kalshi, seeking up to $61.2M and a block on event contracts

Utah has opened a new front against Kalshi, filing a complaint at the Third District Court on Tuesday, October 20. State attorney general Derek Brown alleges that Kalshi, an affiliate and two Susquehanna trading firms breached Utah's gambling laws, and the state puts the damages and financial remedies it is seeking at up to $61.2 million.

The complaint asks the court to stop Kalshi from offering event contracts on sports, politics, elections and culture in the state. It also seeks georestrictions and the recovery of profits allegedly obtained through unlawful transactions.

According to the attorney general's office, Kalshi generated between $30.6 million and $61.2 million in fees from Utah accounts on total trading volume of $3 billion. The filing says at least 32,000 Utah users have traded on the platform. It further alleges that Kalshi began offering its markets by September 2024 despite knowing they were not legal under state law. Brown said Utah has opposed gambling since gaining statehood in 1896 and that this position has not changed.

Kalshi rejected the criticism. A company spokesperson described it as a federally regulated financial exchange, comparable to the stock market, where customers trade with one another and set prices. The spokesperson said that as a national derivatives market overseen by the CFTC, Kalshi answers to federal law and that no single state should have a veto over it. The company added that the new state court action does not affect its ongoing federal litigation.

That litigation has so far gone against Kalshi. After a lawsuit filed in February, US District Judge Robert Shelby ruled in August that the company's argument had not convinced the court and granted summary judgment to the state. Kalshi has appealed to the Tenth Circuit Court of Appeals, and no decision has been issued.

For now, the state has chosen civil proceedings. Brown has not said whether his office will pursue criminal investigations or proceedings. He stated that the office expects prediction markets to comply with gambling laws and suggested that the case is part of a larger investigation.