Utah Seeks $30M-$60M From Kalshi and Partners Over Alleged Illegal Betting

Attorney General Derek Brown announced a lawsuit on Oct. 20, 2026, revealing that Utah is seeking the return of approximately $30 million to $60 million. According to Cointelegraph, the state alleges this figure represents the profits earned by Kalshi and its partners from event contracts that Utah views as illegal gambling. Brown is urging a court to compel the platform and co-defendants to surrender these funds.

The civil complaint targets Kalshi, its affiliates, and two Susquehanna trading companies. At the heart of the litigation is the question of whether federal derivatives oversight exempts event contracts from state gambling regulations.

$30M-$60M: Utah Targets Alleged Kalshi Betting Profits

This financial figure does not represent a damages award. Instead, it reflects Utah’s estimation of the total revenue generated by the disputed activity.

Read More: Kalshi Risks $500,000-a-Day Fine as Michigan Court Extends Sports Market Ban

According to The Defiant, Utah is also pursuing injunctions and restitution.

More Than 32,000 Utah Users Allegedly Accessed Kalshi

Brown asserts that Kalshi has enabled unlawful wagering within the state since 2024, providing access to over 32,000 Utah residents and resulting in substantial financial losses for them.

Describing the situation as a “significant and substantial ongoing harm” to locals, the state wants the court to ban sports, elections, politics, culture, and mention bets. Granting this request would subject multiple categories of event contracts to state-level restrictions.

Two Susquehanna Firms Face the Kalshi Lawsuit

By naming two Susquehanna trading companies, the lawsuit expands beyond Kalshi and its network of affiliates. Utah contends that these market makers sustained the wagering activity even after Kalshi suffered a defeat in federal court.

Jacki McGavick, a spokesperson for Kalshi, defended the platform, emphasizing that it operates as a federally regulated financial exchange overseen by the Commodity Futures Trading Commission. Pointing to the lawsuit, she stated, “Our customers trade with each other and set the prices.”

Her defense centers on the premise that Kalshi answers solely to federal law, arguing that individual states should not possess veto power over a national derivatives market. This position relies entirely on the company’s federal regulatory standing.

August and September Rulings Preceded Utah’s New Action

Kalshi initiated legal action against Utah first in February, following the passage of a state law that classifies prediction-market wagering as illegal gambling.

In August, state officials secured a ruling when a court determined that federal CFTC law did not preempt state gambling statutes. Shortly after, an appellate court denied Kalshi’s request for an injunction in September, which prevents the platform from operating locally while its appeal moves forward.

McGavick noted that the new state-level enforcement action remains separate from Kalshi’s ongoing federal litigation. Consequently, the latest monetary demand functions as an additional civil enforcement layer in the broader battle over market access.

The next major milestone to monitor is whether the US Supreme Court agrees to hear a petition involving New Jersey’s dispute with Kalshi. That case could bring the jurisdictional conflict between individual states and the CFTC before the high court, especially as the federal regulator asserts “exclusive jurisdiction” over event contracts on these platforms.

FAQ

Which categories of Kalshi bets does Utah want the court to stop?

Brown identified sports, elections, politics, culture and mention bets. Utah’s requested restrictions cover those markets within the state.

When did Kalshi file its own lawsuit against Utah?

Kalshi brought its lawsuit in February 2026. It challenged Utah after lawmakers passed a bill classifying prediction-market betting as gambling under state law.

Which federal regulator oversees Kalshi and claims exclusive jurisdiction over its event contracts?

The Commodity Futures Trading Commission, or CFTC, oversees Kalshi as a derivatives exchange. Its jurisdictional position supports Kalshi’s argument that federal law governs its markets.

Which state is pursuing criminal charges against Kalshi?

Arizona is pursuing criminal charges against Kalshi and was identified as the only state doing so. Utah’s newly announced lawsuit is a civil action.

Which state’s Kalshi dispute is the subject of the petition being considered by the Supreme Court?

The petition concerns New Jersey’s dispute with Kalshi over allegedly illegal sports bets. The Supreme Court is considering whether to take the case.

This article is for information only and is not financial advice.