Utah seeks up to $61.2 million from Kalshi

The Attorney General of Utah has initiated court proceedings against Kalshi and two Susquehanna trading firms, claiming that the state gambling regulations have been violated. The complaint was lodged in the Third District Court of Utah on October 20th, issuing $61.2 million in damages in addition to other monetary and injunctive relief. The complaint requests that the Court prohibit Kalshi from trading event contracts associated with sports and politics in the state of Utah and from receiving profits generated during the illegal transactions. According to the legal documents, Kalshi had about $3 billion traded by users from Utah, earning the company an estimated $30.6 million to $61.2 million in fees. Kalshi does not agree with Utah’s arguments and insists that it has the license from CFTC and does not operate as a gambling entity. According to a Kalshi spokesperson, the company is supervised by CFTC and its clients only trade with each other while the prices are set during the process of trading. The dispute centres on whether states can apply their gambling laws to event contracts offered by federally regulated prediction markets. The most recent complaint stems from an August ruling by the US District Judge Robert J. Shelby, who ruled in favor of Utah in its legal battle with Kalshi. The judge held that the Commodity Exchange Act (CEA) does not prevent the state from implementing its own gambling regulations in cases involving Kalshi’s sports event contracts. The ruling represents a setback for Kalshi’s argument that federal oversight shields its products from state-level gambling enforcement.