Utah Files Criminal Charges Against Kalshi and Its Co-Founders

Prosecutors say an undercover investigator placed 12 sports bets from inside Utah, a day after the CFTC sued the state to stop it enforcing its gambling laws against prediction markets.

Francis Gable

29/10/26 · 2 minOctober 29, 2026 · 2 min read

Utah prosecutors filed criminal charges against Kalshi and its two co-founders on Oct. 28, accusing the prediction market of promoting illegal gambling after an undercover state investigator bet on sports from inside Utah.

Utah is the second state to criminally charge a federally registered prediction market, after Arizona in March. Chief Executive Tarek Mansour and co-founder Luana Lopes Lara now face personal felony charges.

Undercover Bets Underpin the Charges

Kalshi's operating company, Mansour and Lopes Lara each face one count of pattern of unlawful activity, a second-degree felony, according to multiple reports. Each also faces 12 counts of online gambling promotion, a third-degree felony, plus one misdemeanor gambling promotion count.

According to the charges, investigator Scott Eggerman of the Utah Attorney General's Office opened an account from a Utah IP address. Between Sept. 13 and Sept. 26, he placed 12 trades on NFL, MLB, MLS, NHL and college football events.

"Calling it a 'prediction market' doesn't change what it is, and being federally registered doesn't put a company above the law."

Attorney General Derek Brown said this when announcing the charges. A Kalshi spokesperson called the case "a crazy overreach" and said the company would stop it in court, "just like we did in Arizona."

Federal Regulators Sue Utah Over Enforcement

The charges came eight days after Utah sued Kalshi in civil court, and about three months after a federal judge ruled that Utah's gambling ban applies to Kalshi.

On Oct. 27, the Commodity Futures Trading Commission (CFTC) announced it had sued Utah to block it from shutting down federally registered exchanges. The CFTC says it has now taken legal action against 10 states in a wider state crackdown on prediction markets.

In Arizona, a federal judge permanently blocked that state's prosecution of Kalshi on May 5, ruling that federal law overrides state gambling laws for these contracts.

The CFTC is asking the federal court in Utah for preliminary and permanent orders stopping the state from enforcing its gambling laws against CFTC-regulated markets. The court date has not yet been reported.

Treat gambling as entertainment you pay for. 18+, and if it stops feeling like entertainment, help exists at BeGambleAware and GamCare.