Utah sues Kalshi for ‘brazen pattern’ of violating state’s gambling ban
Utah Attorney General Derek Brown sued Kalshi, seeking to block the prediction market from taking bets from Utahns.Summary
Utah Attorney General Derek Brown filed a lawsuit Tuesday against prediction market platform Kalshi, seeking to block the company from taking bets from Utahns and alleging it has engaged in a "brazen pattern of unlawful conduct" that violates state law and the Utah Constitution, which bans gambling in all forms. The complaint, filed in 3rd District Court, accuses Kalshi and its affiliates of acting like "the manager of a back-alley gambling den" and seeks "unjustly acquired profits" plus restitution for damages, including "gambling-related" harm to Utahns' mental health. The attorney general's office estimates Kalshi has made between about $30.6 million and $61.2 million in fees from "illegal wagers" placed by Utah accounts, based on a rake of $0.01 to $0.02 per wager and more than $3 billion in wagers from Utah accounts across Kalshi's lifetime. The complaint says Kalshi has more than 32,000 verified users in Utah with more than $1 million "invested" on the exchange.
Kalshi spokesperson Jacki McGavick issued a prepared statement standing by the company's position that it is a federally regulated financial exchange, like the stock market, overseen by the CFTC, and that no single state should have a veto over it. The company has argued it falls under federal jurisdiction and has appealed a recent federal order rejecting that argument; that federal litigation is ongoing.
Brown said the profit estimates could grow as the lawsuit uncovers more information, and that his office is focusing on Kalshi for now while urging other companies operating in Utah to read the complaint and follow state law. When asked why his office filed a civil complaint rather than criminal charges, Brown said they are focusing on a civil filing for now and declined to comment on potential criminal investigations.
(Source：Cedar City News)