Utah has escalated its campaign against prediction market operator Kalshi by filing 14 criminal charges against the company and its founders, CEO Tarek Mansour and COO Luana Lopes Lara. This move follows a recent civil lawsuit and comes amid growing legal and regulatory scrutiny of prediction markets in the United States.
Details of the Utah Criminal Case
The charges against Kalshi and its founders include one count of pattern of unlawful activity (a second-degree felony), 12 counts of online gambling promotion (third-degree felonies), and one count of general gambling promotion (a class A misdemeanor). According to the complaint, an undercover investigator with the Utah Attorney General’s Office opened a Kalshi account using Utah credentials and placed 12 sports wagers totaling around $115. Prosecutors allege Kalshi knowingly accepted these wagers from a Utah resident and collected associated fees, despite clear state prohibitions.
The complaint further claims that Kalshi’s leadership continued to offer online gambling services in Utah even after a federal judge granted the state summary judgment and denied Kalshi’s injunction request. The criminal case follows a civil suit seeking to block Kalshi’s operations and recover alleged illegal proceeds. The broader legal dispute has attracted attention from numerous states, industry groups, and tribal organizations, many of whom filed amicus briefs in ongoing federal appeals.
Legal Context and National Implications
Utah is now the second state, after Arizona, to pursue criminal proceedings against Kalshi. In Arizona, a federal court granted a preliminary injunction blocking prosecution, a decision currently under appeal. The legal battles in both states highlight the ongoing uncertainty over the regulation of prediction markets and the balance of state versus federal authority in gambling enforcement.
Kalshi’s situation is further complicated by recent lawsuits involving other parties, including the CFTC and Crypto.com, who have challenged state enforcement actions in federal court. These cases could set important precedents for how prediction markets are regulated across the U.S.
Why This Matters for the Industry
The escalation of legal action against Kalshi is significant for operators, affiliates, and suppliers involved in prediction markets and related gambling products. The case underscores the risks of operating in states with strict gambling prohibitions and highlights the need for robust compliance measures. For affiliates and suppliers, the outcome could influence partner selection and marketing strategies, while regulators may look to these cases when shaping future policy or enforcement priorities.
The involvement of multiple states and federal agencies signals that prediction markets are likely to remain a focal point in the broader debate over gambling regulation in the U.S.
Key takeaways
- Utah has filed 14 criminal charges against Kalshi and its founders for alleged illegal gambling operations.
- This action follows a civil suit and comes amid wider legal battles involving multiple states and federal agencies.
- The outcome of these cases could shape future regulation and enforcement of prediction markets in the U.S.
- Operators, affiliates, and suppliers face increased compliance risks in states with strict gambling laws.
Update (02.11.2026)
On October 29, 2026, the United States and the CFTC filed an emergency motion in federal court seeking to halt Utah’s ongoing criminal and civil proceedings against Kalshi. The requested order would prevent Utah from pursuing enforcement actions related to event contracts listed on CFTC-regulated markets and require the state to dismiss or stay such cases. Judge Robert J. Shelby set a status conference for November 6, 2026. Kalshi’s founders have been summoned but not arrested. Both Utah Attorney General Derek Brown and Kalshi released official statements. Additionally, Utah filed a civil enforcement action against Kalshi and two Susquehanna trading firms on October 20, 2026. The Tenth Circuit previously denied Kalshi’s request for an injunction pending appeal on September 8, 2026.
Update (03.11.2026)
Following the charges against Kalshi, major operators including DraftKings, FanDuel, Fanatics, and PrizePicks have restricted or discontinued certain prediction market offerings in Utah. DraftKings and FanDuel have ceased offering sports, political, novelty, and other event contracts to Utah customers, though financial event contracts remain available and existing positions will settle as usual. Fanatics Markets will halt all trading in Utah from November 4, while PrizePicks has disabled Team Picks and Culture Picks but continues to offer Player Picks. Utah Attorney General Derek Brown publicly warned other operators to review the complaint and comply with state law. The enforcement action has primarily targeted sports and political contracts, but Utah has also sought restrictions on cultural and mention markets. On the same day as the CFTC and DOJ lawsuit, Crypto.com and its OG.com platform filed a lawsuit against Utah. Additionally, a bipartisan coalition of 37 states and Washington, D.C., submitted an amicus brief supporting Utah's enforcement authority in the 10th Circuit. DraftKings, FanDuel, and Fanatics are now limiting sports event contracts to states without licensed sportsbooks, while Kalshi and Polymarket continue to contest state restrictions in court.