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Utah seeks to recover an estimated $30.6 million to $61.2 million in fees that Kalshi allegedly collected from state accounts. Attorney General Derek Brown filed the civil lawsuit on October 20, accusing Kalshi and Susquehanna entities of unlawful online gambling.
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The complaint reaches beyond the prediction market operator to companies taking the other side of customer trades. Utah alleges that Susquehanna profits from wagers placed by residents, making its role as a market maker part of the enforcement case.
Brown filed the action in the Third Judicial District Court in Salt Lake County. Alongside financial relief, Utah wants an order stopping the disputed activity within its borders.
Kalshi maintains that its sports event contracts fall under the Commodity Futures Trading Commission rather than state sports betting rules. Utah, however, prohibits gambling under its constitution.
The legal question concerns federal preemption: whether federal commodities law prevents Utah from enforcing its gambling restrictions against those contracts. Federal registration alone does not settle that dispute.
The complaint alleges:
“KalshiEx participates in the same way the manager of a back-alley gambling den (or cardroom) participates in gambling: by hosting and facilitating the gambling events and by taking a percentage fee (or “rake”) of amounts gambled.”
Meanwhile, Kalshi began its own federal challenge in February. A judge ruled for Utah in August, and the Tenth Circuit denied emergency protection in September while Kalshi pursued its appeal.
No. Restitution forms part of the requested relief, rather than an award the court has granted.
Utah alleges that its market-making activity involves accepting and profiting from unlawful wagers.