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Utah has filed criminal charges against Kalshi, CEO Tarek Mansour and COO Luana Lopes Lara, alleging they promoted illegal online gambling and allowed an undercover agent to place wagers. Attorney General Derek Brown said that calling bets “prediction markets” does not change their nature or put the company above state law.
Why it matters
The charges escalate a dispute over whether Kalshi’s event contracts fall under state gambling laws or federal commodities oversight. Utah sued Kalshi and two Susquehanna trading firms last week, arguing the platform let residents bet on sports, elections, politics and other outcomes. The state says labeling those bets “event contracts” does not alter their character.
The federal-state conflict is now active in court on both sides. The CFTC sued Utah on Tuesday, asserting its authority over prediction markets. Chair Michael Selig said Congress gave the agency sole responsibility for overseeing these markets. The CFTC has sued at least 10 states as it seeks to establish that authority.
Market impact
The case puts the legal status of prediction-market contracts and the reach of federal oversight in focus for platforms, traders and operators across the sector. Kalshi previously sued Utah in February to block enforcement of state gambling laws, but a judge rejected its request, finding the federal law it cited did not prevent Utah from enforcing its own laws.
The criminal charges add a new layer to the dispute. The outcome could shape how prediction markets operate in states challenging their products, while the competing lawsuits leave the boundary between state gambling rules and federal derivatives oversight unresolved.
Frequently asked questions
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Who was charged in Utah's case against Kalshi?
Utah charged Kalshi, CEO Tarek Mansour and COO Luana Lopes Lara. The state alleges they promoted illegal online gambling and allowed an undercover agent to place wagers.
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What does Utah allege Kalshi allowed users to bet on?
Utah's lawsuit says Kalshi let state residents bet on sports, elections, politics and other outcomes, which the state argues violates its gambling laws.
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Why is the CFTC suing Utah?
The CFTC argues that it has federal authority over prediction markets. Chair Michael Selig says Congress gave the agency sole responsibility to oversee them.
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How many states has the CFTC sued over prediction markets?
The CFTC has sued at least 10 states as it seeks to assert its oversight authority over prediction markets.
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Did a judge block Utah from enforcing its gambling laws against Kalshi?
No. A judge denied Kalshi's February request to block enforcement, ruling that the federal law Kalshi cited did not prevent Utah from enforcing its laws.
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