Utah Judge Rejects Kalshi’s Federal Shield From Gambling Laws
A federal judge ruled that the Commodity Exchange Act does not protect Kalshi from Utah's anti-gambling laws.Summary
U.S. District Judge Robert J. Shelby has granted summary judgment to the state of Utah, ruling that the Commodity Exchange Act (CEA) does not preempt state anti-gambling laws regarding Kalshi's sports event contracts. The court found that the CEA's jurisdictional provisions are ambiguous, and since courts generally disfavor preemption in such cases, Utah maintains the right to enforce its constitutional ban on gambling.
Kalshi had argued that the Dodd-Frank Act established federal preemption over derivatives trading, but the judge dismissed this as an "implausible" reading of congressional intent. This ruling is significant because Utah's constitution prohibits gambling, making online betting a third-degree felony. The decision has already been cited by New York as supplemental authority in its own legal battles regarding unlicensed gambling operations.
Kalshi intends to appeal the decision to the Tenth Circuit. Legal experts suggest that if multiple appellate circuits rule against prediction markets, it could create a circuit split ripe for Supreme Court review. While Kalshi's services remain available in Utah for now, the ruling adds momentum to the efforts of over 40 states seeking to assert jurisdiction over prediction markets.
(Source：Bitcoin News)