Utah Attorney General Derek Brown filed criminal charges Wednesday against Kalshi, CEO Tarek Mansour, and COO Luana Lopes Lara. The charges include one count of general gambling promotion as a class A misdemeanor, one count of pattern of unlawful activity as a second-degree felony, and 12 counts of online gambling promotion as third-degree felonies.
The dispute stems from an August ruling by U.S. District Court Judge Robert J. Shelby, who found that federal law did not preempt Utah from enforcing its anti-gambling laws against the prediction market platform. Despite that ruling, a special agent from the Attorney General's Office created an undercover account with a Utah-based identity and spent $114.87 on 12 wagers over two weeks. The wagers included NFL, MLB, college football, and Major League Soccer bets.
"A federal court has already ruled that Utah's gambling laws apply to Kalshi," Brown told Deseret News. "Kalshi kept taking bets from Utahns anyway. That is illegal, and we're putting a stop to it."
Kalshi challenged Shelby's ruling before the U.S. Court of Appeals for the 10th Circuit and sought an injunction in September. The 10th Circuit denied the request, leaving Shelby's order in effect while the appeal proceeds.
A Kalshi spokesperson called the criminal charges a "crazy overreach" and said Brown was "playing politics."
Arizona and Utah are the only two states to pursue criminal charges against Kalshi. The prediction platform faces more than 20 lawsuits and cease and desist actions across the country. The NFL, 39 states, and Washington, D.C., recently filed amicus briefs arguing that conflicting court decisions left them unsure whether states or the CFTC has regulatory authority over prediction markets.