Utah Attorney General Derek Brown announced a lawsuit against prediction markets platform Kalshi, its affiliates and two Susquehanna trading companies, alleging that the platform has been facilitating illegal betting in the US state since 2024.

Speaking at a Tuesday press briefing, Brown said Utah officials have petitioned a court to compel the companies to return approximately $30 million to $60 million in profits they made through allegedly illegal event contracts. Event contracts are financial instruments whose payouts depend on the outcomes of real-world events such as elections and sports contests. The attorney general further alleged that Kalshi illegally offered its services to more than 32,000 users in the state, resulting in significant losses.

"Under Utah law, I have determined that this operation is causing a significant and substantial ongoing harm to a significant number of Utahns," Brown said. "And so today, we are asking the court to stop sports, elections, politics, culture and mention bets here in Utah."

An ongoing legal dispute

Kalshi first sued Utah in February, after state lawmakers passed a bill classifying betting on prediction markets as gambling under state law. In August, a judge ruled in favor of Utah officials, determining that federal laws under the US Commodity Futures Trading Commission (CFTC) do not preempt state gambling laws. In September, an appellate court denied Kalshi's request for an injunction, blocking the platform from operating while its appeal moves forward.

The dispute underscores the core tension surrounding prediction markets in the US: platforms like Kalshi operate as federally regulated exchanges overseen by the CFTC, while state regulators such as Utah's treat betting on event contracts as gambling under their own laws.

Kalshi pushed back against the new lawsuit in a statement to Cointelegraph. "Kalshi is a federally regulated financial exchange, like the stock market," company spokesperson Jacki 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."

Legal battles across the US

The civil suit is one of many filed by US state authorities against prediction market platforms such as Kalshi and Polymarket over alleged violations of state gambling laws, many of them involving sports betting. Officials in Arizona remain the only ones in the United States pursuing criminal charges against Kalshi, while states including Michigan, Ohio, Kentucky, Nevada, Massachusetts, Wisconsin and New York have filed civil suits against one or more prediction market companies.

The Utah lawsuit comes as the US Supreme Court considers whether to accept a petition to weigh in on New Jersey's own case against Kalshi over allegedly illegal sports bets. If the high court takes up the case, it could settle whether prediction market companies answer to state authorities or to the CFTC, which claims "exclusive jurisdiction" over the platforms' event contracts.