Utah Sues Kalshi, Calling Its Sports Contracts an Illegal Gambling Nuisance

The attorney general wants the prediction market shut off in Utah and its fees from local accounts paid back, two months after a federal judge ruled the state's gambling ban applies to it.

Francis Gable

21/10/26 · 2 minOctober 21, 2026 · 2 min read

Utah Attorney General Derek Brown sued Kalshi on Oct. 20, asking a state court to treat the prediction market as an illegal gambling operation and shut it down in Utah.

The state says more than 32,000 Utahns held verified Kalshi accounts as of February. It estimates Kalshi took between $30.6 million and $61.2 million in fees from those accounts, according to local reports of the 63-page complaint.

Utah Says Kalshi Runs a Sportsbook

The lawsuit, filed in 3rd District Court in Salt Lake City, names Kalshi, its subsidiaries and two Susquehanna trading firms. The state says those firms hold the other side of Utahns' bets and collect when they lose.

The complaint calls Kalshi's yes-or-no event contracts "indistinguishable" from sportsbook bets. Utah's constitution prohibits gambling.

The state wants a court order ending Kalshi contracts on sports, elections, politics and culture in Utah, with a geolocation provider blocking local users. It also seeks restitution of up to $60 million. Brown said Kalshi is causing "a significant and substantial ongoing harm to a significant number of Utahns."

"As a national derivatives market overseen by the CFTC, Kalshi answers to federal law, and no single state should have a veto over it."

Kalshi gave that statement to several Utah outlets.

Federal Courts Have Already Sided With Utah

Kalshi sued Utah's leaders first. On Aug. 4, U.S. District Judge Robert J. Shelby ruled that federal commodities law does not stop Utah from enforcing its anti-gambling laws against the exchange.

In September, the 10th U.S. Circuit Court of Appeals refused to protect Kalshi from state action while it appeals, according to multiple reports. "After that decision by the federal court, the bets kept on coming," Brown told reporters.

Utah follows New York, which sued Kalshi seeking $36 billion in July, and Washington, where a judge rejected Kalshi's preemption defense.

The 10th Circuit has not yet ruled on Kalshi's appeal of the August decision.

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