Utah Attorney General Derek Brown has sued prediction-market operator Kalshi and affiliated companies in state court, seeking an injunction against specified event contracts, court-approved location controls and financial relief. The case extends an already active federal-state dispute over whether federally regulated prediction markets must also comply with Utah’s gambling laws.
The state’s verified complaint, filed in Utah’s Third Judicial District Court in Salt Lake County, names five Kalshi entities and two affiliated market-making companies. It asks the court to declare sports, election, politics, culture and “mentions” contracts identified in the filing illegal in Utah; issue preliminary and permanent injunctions; require an approved third-party geolocation provider; and consider restitution, damages and disgorgement. These are Utah’s allegations and requested remedies, not judicial findings.
Utah argues that Kalshi functions like a sportsbook when it facilitates event contracts and collects transaction fees. The complaint alleges the platform continued offering prohibited wagers after an August federal ruling declined to block Utah’s enforcement. The state constitution authorizes the Legislature to prohibit gambling, and Article VI, Section 27 directs lawmakers to prohibit games of chance, lotteries and gift enterprises.
Kalshi disputes the state’s characterization. A company spokesperson told Utah News Dispatch that Kalshi is a federally regulated financial exchange overseen by the Commodity Futures Trading Commission and that no individual state should have a veto over it. Kalshi has appealed the earlier federal decision and maintains that shutting Utah users out could conflict with federal requirements for impartial access to a designated contract market.
The earlier ruling did not finally resolve every claim in the new lawsuit, but it shaped the legal terrain. As summarized in reporting on the August order, U.S. District Judge Robert Shelby concluded that Kalshi had not shown federal commodities law preempted Utah’s anti-gambling mandates. Kalshi appealed, preserving its federal-jurisdiction argument.
The scale of the dispute is significant but contested. The complaint estimates Kalshi earned between $30.6 million and $61.2 million in fees connected to Utah accounts and says more than 32,000 verified Utah users participate. The Salt Lake Tribune reported that Brown emphasized the lawsuit targets the companies rather than account holders. Any restitution formula, disgorgement amount or operational restriction would still require court action. The requested geolocation mandate would require the platform to identify users physically present in Utah, a remedy the company has previously described as technically costly and disruptive to open positions.
For Utah users, the platform does not automatically disappear because a complaint was filed. The state must obtain an injunction or final judgment, while Kalshi can challenge the allegations and seek appellate relief. The case may therefore determine not only access in Utah, but also how far state gambling rules can reach into a federally supervised national exchange.
