Utah's case against Kalshi
Attorney General Derek Brown brought the case before the state's district court in Salt Lake County. It names Kalshi, Inc., its exchange KalshiEX LLC, three other Kalshi companies, and two Susquehanna firms. Utah calls the two Susquehanna firms and Kalshi Trading "market makers".[1][2]
According to Utah, the defendants have offered gambling bets to its residents since at least September 2024. It says Kalshi's bets are "indistinguishable" from those of a traditional sportsbook, and that the market makers take part by placing bets themselves. It wants a court order to stop the conduct, the profits handed back, and damages, punitive ones included.[2]
According to Brown's office, the case targets contracts on sporting events, elections, political questions and other outcomes. Brown said Kalshi was running an online casino in the state under the label of a prediction market, which Utah law does not allow.[1]
This is not the first round. In February Kalshi took the state's officials to federal court. In August a federal judge sided with Utah, finding that federal law leaves the state's gambling bans standing, and the federal appeals court for the Tenth Circuit refused to block enforcement while Kalshi appeals.[1]
The CFTC goes to court
Six days after Utah filed, on 26 October, the US government and the Commodity Futures Trading Commission (CFTC) went to federal court themselves, naming the state and Brown as defendants. They ask the judge to declare that state law has no force over trades on exchanges under CFTC supervision. They also want Utah stopped from investigating firms the CFTC oversees, along with their affiliates and partners, and from applying state law to those trades.[2]
Michael Selig, who chairs the CFTC, said Congress had left oversight of these markets to his agency alone. By its own count, the CFTC has also taken legal action against nine other states, and has made written arguments to four federal appeals courts and to the top court of one state.[3]
The same fight in other states
The question is the one behind the lawsuits two exchanges brought against Missouri: is a sports event contract a bet for a state to license, or a derivative for the federal regulator? On a separate track, the commission has proposed writing event contracts into its definition of a swap.
Sources
- Attorney General of Utah (United States) — Utah sues Kalshi (20 October 2026, English). The case, the contracts it covers, the attorney general's statement, and the earlier federal case and appeal.
- United States District Court for the District of Utah — United States and Commodity Futures Trading Commission v. State of Utah and Derek Brown, Complaint for Declaratory and Injunctive Relief (case 2:26-cv-01055, filed 26 October 2026, PDF via the CFTC, English). The defendants in Utah's state case and what it alleges and seeks, and the relief the CFTC asks for.
- Commodity Futures Trading Commission (United States) — CFTC Sues to Block State Enforcement in Utah Amid Ongoing Efforts to Preserve Jurisdiction (release 9315-26, 27 October 2026, English). The chairman's statement and the CFTC's proceedings against other states.
