During a Tuesday press briefing, Attorney General Brown revealed that Utah officials have officially petitioned a state court to compel the involved companies to disgorge an estimated $30 million to $60 million in profits allegedly generated through unlawful event contracts. According to the attorney general’s office, Kalshi unlawfully extended its services to more than 32,000 users across Utah, a practice that state authorities claim has resulted in substantial financial losses for local participants.
"Under Utah law, I have determined that this operation is causing a significant and substantial ongoing harm to a significant number of Utahns," Brown stated during the briefing. "And so today, we are asking the court to stop sports, elections, politics, culture, and mention bets here in Utah."
The legal confrontation between Utah and Kalshi is the culmination of a rapidly escalating jurisdictional dispute. Kalshi initially took legal action against Utah in February, following the passage of state legislation that explicitly classifies betting on prediction markets as a form of gambling under state law. The legislative move set the stage for a broader regulatory showdown over whether federal oversight supersedes state-level prohibitions.
In August, a state judge ruled decisively in favor of Utah officials, concluding that federal laws governing the United States Commodity Futures Trading Commission (CFTC) do not preempt state-level gambling laws. The legal pressure intensified in September when an appellate court denied Kalshi’s request for an injunction, effectively blocking the platform from operating within the state while its appeal moves through the judicial system.
Responding to the lawsuit, Kalshi spokesperson Jacki McGavick defended the platform’s operational model and federal standing in a statement provided to Cointelegraph.
"Kalshi is a federally regulated financial exchange, like the stock market," McGavick said. "Our customers trade with each other and set the prices. As a national derivatives market overseen by the CFTC, Kalshi answers to federal law, and no single state should have a veto over it. This latest state court action does not affect our ongoing federal litigation."
Ongoing legal battles across the US
The civil lawsuit brought by Utah is far from an isolated incident. It represents just one front in an expanding nationwide legal campaign launched by various state authorities against prominent prediction market platforms, including Kalshi and Polymarket, over alleged violations of state gambling statutes, particularly concerning sports-related event contracts.
While state regulators across the country have increasingly targeted these platforms, the enforcement strategies vary significantly by jurisdiction. Officials in Arizona remain unique in the United States for pursuing criminal charges against Kalshi. Meanwhile, a growing coalition of states—including Michigan, Ohio, Kentucky, Nevada, Massachusetts, Wisconsin, and New York—have opted to file civil lawsuits against one or more prediction market companies to halt operations and penalize alleged non-compliance with local gaming laws.
The legal friction in Utah arrives at a critical juncture for the industry as a whole. The case coincides with the United States Supreme Court considering whether to accept a petition to weigh in on a parallel legal battle initiated by New Jersey against Kalshi over allegedly illegal sports bets.
Should the nation’s highest court decide to hear the case, the resulting decision could provide a definitive national precedent, resolving the long-standing tug-of-war over regulatory authority. Specifically, a Supreme Court ruling could clarify whether prediction market companies fall strictly under the purview of state regulatory authorities or whether the CFTC maintains "exclusive jurisdiction" over the platforms and the event contracts they offer to the public.
