Utah Attorney General Derek Brown has sued Kalshi and affiliated companies in state court, seeking to stop the prediction-market operator from offering event contracts to residents and to recover alleged illegal gains. The suit targets sports, election, culture and “mention” markets, and asks the court to require geofencing of Utah and approve a geolocation tool to enforce it.
The verified complaint in Utah’s Third Judicial District Court names Kalshi Inc., KalshiEX LLC, Kalshi Klear Inc., Kalshi Klear LLC, Kalshi Trading LLC, Susquehanna International Group LLP and Susquehanna Government Products LLLP. Utah seeks to halt the alleged conduct, recover money it says the defendants made from Utah wagers and compensate the state and residents for alleged harm. The requested monetary recovery exceeds $300,000.
Utah alleges that the Kalshi enterprise accepts and holds bettor funds, pays winners and keeps part of each wager. It characterizes Kalshi Trading as an in-house counterparty that takes positions opposite retail customers, while alleging that Susquehanna’s entities provide institutional market-making and liquidity. The defendants are accused of collectively offering, facilitating, marketing and profiting from gambling bets in Utah.
The state says the products are indistinguishable from conventional sportsbook wagers, including proposition bets, parlays, point spreads and game-winner bets. It also alleges Kalshi advertised its service in Utah as a sports-betting platform that was legal nationwide, while offering bets to Utah residents from at least September 2024.
The complaint puts the scale of the alleged activity at more than 32,000 verified Utah accounts eligible to trade as of Feb. 25, out of about 55,800 accounts registered to Utah addresses. Those accounts held more than $5 million in open positions, representing 1.1% of Kalshi’s $451.3 million total open interest at the time.
Utah estimates that its residents had placed more than 3 billion contracts through Oct. 19, based on their share of Kalshi activity. It estimates Kalshi earned between $30.6 million and $61.2 million in fees from Utah-linked wagers, using an assumed fee of one to two cents a contract. A separate estimate using Kalshi’s reported historical average fee rate put the figure nearer $22.7 million. The state also estimated Utah residents lost $5.5 million in individual wagers.
The suit follows Utah’s victory in Kalshi’s federal challenge to state gambling law. On Aug. 4, U.S. District Judge Robert J. Shelby granted Utah summary judgment, finding that federal commodities law did not displace the state’s authority to prohibit gambling and that Kalshi’s federally registered exchange status did not prevent Utah from treating its sports contracts as gambling.
Kalshi appealed that ruling to the 10th U.S. Circuit Court of Appeals, but a court denied its request to stop Utah enforcing its laws while the appeal proceeds. Kalshi and other prediction-market operators have argued that their event contracts are federally regulated financial swaps rather than gambling, an issue on which federal courts have reached conflicting conclusions.
Utah’s constitution bars the Legislature from authorizing games of chance, lotteries or gift enterprises. The attorney general’s office has said offering online gambling to anyone in the state is a third-degree felony, although this case seeks civil remedies against the companies rather than charges against individual customers.
