Utah has filed criminal charges against prediction-market platform Kalshi and two senior leaders, CEO Tarek Mansour and chief operating officer Luana Lopes Lara, accusing them of illegal online gambling in the state.
The court filing lists 13 felony counts and one misdemeanor count against the company and the two executives.
Attorney General Derek Brown said, "Gambling is illegal in Utah, whether you place the bet, run the game, or promote it. Calling it a 'prediction market' doesn't change what it is, and being federally registered doesn't put a company above the law." He added that a federal court had already ruled Utah's gambling statutes apply to Kalshi and that the firm kept taking bets from Utah residents despite the ruling.
Earlier, Kalshi sued Utah in February to block enforcement of the state's anti-gambling laws, but a federal judge in August decided that federal law does not preempt state enforcement.
The case arrives amid a nationwide dispute over whether prediction-market platforms fall under state or federal jurisdiction, a conflict that prompted New Jersey to ask the Supreme Court for guidance last month.
Utah's complaint claims Kalshi "derived proceeds from multiple episodes of online gambling promotion, which is illegal" under state law and cites a dozen incidents between Sept. 13 and Sept. 24 where the company allegedly offered gambling to a state law-enforcement officer using an undercover persona with a Utah address, phone number, bank account and verified geolocation.
The filing states that Kalshi earned fees from each wager, "received proceeds derived, directly or indirectly, from a pattern of unlawful activity" and used those proceeds in its operations.
Kalshi maintains that its service differs from traditional gambling and is regulated by the Commodity Futures Trading Commission. A company spokesperson called the Utah action "a crazy overreach; Utah is clearly playing politics" and said they will contest the case in court, as they did in Arizona.
Arizona previously filed criminal charges against Kalshi for alleged illegal gambling and election wagering, but a judge blocked that case in April.
