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Utah sued Kalshi and two Susquehanna trading firms, accusing them of operating an illegal gambling business in the state. Attorney General Derek Brown's complaint names five Kalshi companies and seeks repayment of allegedly illegal proceeds, compensation for the state and residents, and damages. Utah estimates Kalshi collected $30.6 million to $61.2 million in fees from Utah-based accounts through Oct. 19, while noting the actual amount could differ substantially.
Why it matters
The lawsuit challenges the claim that prediction-market wagers become something other than gambling when labeled “event contracts.” Utah alleges that KalshiEx runs the platform and takes a cut, while Kalshi Trading and the Susquehanna firms take the opposite side of users' bets and collect when users lose. Sports and gaming attorney Daniel Wallach called it the first state attorney general enforcement action targeting prediction-market market makers.
Utah is seeking to block sports, election, politics, culture and “mentions” bets, and wants more precise location checks to enforce state restrictions. Brown also criticized the platforms' appeal to young men, saying they were not helping users invest or providing insight.
Market impact
The case adds to legal pressure on Kalshi after August lawsuits from Connecticut and Baltimore alleging unlicensed sports betting. In September, a federal appeals court ruled Ohio and Tennessee could enforce their sports betting laws against Kalshi, rejecting its argument that federal oversight shielded it from state laws. Kalshi disagreed with that ruling and said it expected it to be overturned.
Utah said it is focused on Kalshi for now, but Brown described the case as part of a larger investigation and left open the possibility of action against other platforms. The dispute puts state-level restrictions, market-making arrangements and location controls at the center of the industry's legal risks.
Frequently asked questions
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Which companies does Utah name in its lawsuit?
The complaint names five Kalshi companies, Susquehanna International Group and Susquehanna Government Products.
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How much does Utah estimate Kalshi collected from state-based accounts?
Utah estimates fees of $30.6 million to $61.2 million through Oct. 19, while noting the actual amount could be higher or lower.
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What types of bets does Utah want to block?
Utah seeks to block sports, election, politics, culture and “mentions” bets, and wants more precise location checks.
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Why are Susquehanna firms included in the case?
Utah alleges that Susquehanna firms, along with Kalshi Trading, take the other side of users' bets and collect money when users lose.
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How does the lawsuit fit into other state challenges to Kalshi?
Connecticut and Baltimore filed August lawsuits over alleged unlicensed sports betting. A federal appeals court later ruled Ohio and Tennessee could enforce their sports betting laws against Kalshi.
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