Kalshi has sued Utah officials in federal court, citing its belief that the state is preparing to launch enforcement action against the prediction market platform.
As first reported by Dustin Gouker’s Event Horizon newsletter, Kalshi filed suit in the U.S. District Court for the District of Utah on Monday. The suit names Utah Gov. Spencer Cox, Attorney General Derek Brown, and three other state leaders as defendants and takes issue with what it called an “intrusion” by Utah into the federal government’s authority to oversee platforms regulated by the Commodity Futures Trading Commission (CFTC).
“Kalshi believes the Governor of Utah and the Attorney General’s Office of Utah will imminently bring an enforcement action against Kalshi with the intent to prevent Kalshi from offering event contracts for trading on its federally regulated exchange,” states the filing. “In threatening to enforce Utah’s anti-gambling laws against Kalshi, defendants are impermissibly intruding on the CFTC’s exclusive authority to regulate futures trading on CFTC-regulated exchanges.”
Kalshi is seeking both a preliminary and a permanent injunction, as well as declaratory relief.
Kalshi feels threatened by Utah
Kalshi’s references to Cox and Brown come after both individuals publicly castigated prediction markets in recent days.
Last week, Utah’s governor responded to CFTC Chairman Michael Selig’s confirmation that the federal agency has begun intervening in court cases related to sports event contracts, and Selig’s vow to state gaming regulators and authorities that “we will see you in court.”
“Mike, I appreciate you attempting this with a straight face, but I don’t remember the CFTC having authority over the ‘derivative market’ of LeBron James rebounds,” Cox posted on X. “These prediction markets you are breathlessly defending are gambling — pure and simple. They have no place in Utah.
“Let me be clear, I will use every resource within my disposal as governor of the sovereign state of Utah, and under the Constitution of the United States to beat you in court.”
Kalshi included that X post as a supporting exhibit in its federal court complaint. The company also referenced an op-ed posted by Brown in which the Attorney General cited Kalshi by name.
“Promoters, most prominently Kalshi, insist this is not gambling at all but merely ‘trading on futures’,” wrote Brown. “… It’s simply a bet, dressed up in different clothing. Betting. Wagering. Trading on futures. A wolf in sheep’s clothing is still a wolf. I was recently asked whether I plan to do anything about the rapid rise of prediction market apps that are now operating in Utah. My response? You can bet on it.”
Utah Sen. John Curtis echoed the calls, posting on X that “sports prediction markets are gambling, and gambling is regulated by states, not the CTFC.”
“If I were the Commission, I wouldn’t bet against Utah,” he added. “Some wagers just aren’t smart—and betting against Utah is one of them.”
Kalshi wrote in its court filing that as a result of the “threatened conduct,” it feels there is a strong likelihood that the state officials will take action. It alleged that “the enforcement of preempted state law threatened by Defendants’ statements” would violate the Supremacy Clause of the U.S. Constitution and subject Kalshi and its customers to irreparable harm.
Another day, another Kalshi lawsuit
In its filing, Kalshi claimed that its counsel made multiple attempts to contact Brown to try to ascertain whether the AG’s Office was preparing to take action against Kalshi, but that “it was met with silence.”
The Utah court case is the latest state-specific litigation battle involving Kalshi.
Although Massachusetts officials including Attorney General Andrea Joy Campbell sued Kalshi in federal court in the Bay State, Kalshi has most commonly made the first move, suing states such as Nevada, Maryland and most recently Tennessee after receiving a cease-and-desist (C&D) order.
There has been no public confirmation of whether Utah, which does not recognize any form of real-money gambling as legal, has sent a C&D to Kalshi or other prediction market platforms. But Kalshi evidently feels the threat is real and imminent.
