Utah Attorney General Derek Brown filed a civil lawsuit on October 20, 2026, against prediction-market operator Kalshi and affiliated entities, seeking to halt their activities in the state and recover estimated tens of millions in profits tied to Utah users.
The action, lodged as a 63-page verified complaint in Salt Lake County’s Third Judicial District Court, names several Kalshi companies along with two Susquehanna trading firms.
Brown’s office contends the platforms have run an illegal gambling operation in Utah despite the state’s long-standing constitutional prohibition on gambling of any kind, which dates to statehood in 1896.
Officials describe the offerings—contracts on sports outcomes, elections, politics, culture, and “mentions”—as indistinguishable from traditional sportsbook wagers.
The suit asks the court to bar the companies from accepting bets from Utah residents, with enforcement through a court-approved geolocation system.
It further demands disgorgement of profits the defendants allegedly obtained unlawfully, restitution for the state and residents, and damages.
Brown has labeled the activity a public nuisance that is inflicting ongoing, substantial harm on a significant number of Utahns, including impacts on mental health.
In public remarks, he stated that the platforms are “engineered to do one thing and one thing alone, and that is to empty your wallet,” and emphasized that the case targets the companies rather than the thousands of individual Utah account holders.
State estimates in the filing put Kalshi’s fee revenue from Utah-linked accounts between roughly $30.5 million and $61.2 million as of mid-October 2026.
Those figures rest on a one- to two-cent fee per wager and an assessment that Utah accounts accounted for about 1.1 percent of platform volume, corresponding to more than three billion wagers over the relevant period.
Separately, the complaint projects that Utah users lost at least $5.5 million. Brown noted these are preliminary calculations expected to be refined through discovery.
As of February 2026, Kalshi had more than 32,000 verified accounts registered with Utah addresses; officials believe the number has grown.
The state-court filing follows an earlier federal dispute. Kalshi sued Utah officials in February 2026, arguing that its status as a Commodity Futures Trading Commission-regulated exchange meant federal commodities law preempted state gambling restrictions.
In early August 2026, U.S. District Judge Robert J. Shelby granted summary judgment to the state, holding that Congress had not overridden traditional state authority over gambling and that Kalshi’s contracts fell under Utah’s ban.
The company has appealed aspects of that ruling, and federal litigation continues.
Brown observed that Kalshi had effectively “lost their bet” that Utah would not enforce its laws.
Kalshi has responded that it operates a national derivatives market under exclusive federal oversight and that no single state should be able to veto its activities.
A company spokesperson said the new state action does not affect the ongoing federal case.
The complaint also alleges the firms continued offering the contracts after the August federal decision and advertised the platform as legal in all 50 states.
Utah is among a small number of states that ban all forms of gambling.
The case is part of broader friction between prediction-market platforms and state regulators over whether event contracts constitute regulated financial instruments or prohibited wagering.
Brown has indicated his office is focused on Kalshi for now while conducting a wider review, and he has urged other operators active in the state to comply with Utah law. The complaint includes a jury demand; any precise monetary recovery would be determined later in the proceedings.
