Utah sues Kalshi and Susquehanna firms over alleged illegal sports betting

Utah Attorney General Derek Brown filed a lawsuit on October 20, 2026, against Kalshi and Susquehanna trading firms for operating an alleged illegal gambling business. The suit seeks up to $61 million in disgorgement, citing over 32,000 Utah accounts and $5.5 million in user losses. While Kalshi argues that federal CFTC oversight preempts state bans, courts previously rejected Kalshi's injunction requests, joining a broader wave of enforcement actions across multiple states.

Utah lawsuit targeting Kalshi and Susquehanna

• ▪Utah Attorney General Derek Brown's lawsuit names Susquehanna International Group and Susquehanna Government Products alongside Kalshi entities, accusing them of acting like a betting house by taking bets against users
• ▪Sports and gaming attorney Daniel Wallach characterized Utah's lawsuit against Kalshi as the first state attorney general enforcement action targeting market makers for prediction markets
• ▪Utah Attorney General Derek Brown filed a lawsuit in state court on October 20, 2026, against Kalshi entities, alleging the platform facilitated illegal sports, election, politics, culture, and mention betting in Utah

Remedies and damages sought by Utah

• ▪Utah seeks disgorgement of approximately $30 million to $61 million in profits and fees that Kalshi collected from Utah-based accounts
• ▪Utah officials petitioned Utah's 3rd District Court in Salt Lake City to compel Kalshi to halt operations in Utah using court-approved geolocation providers, declare Kalshi a public nuisance, and pay damages and restitution
• ▪Utah estimates that more than 32,000 state residents had verified Kalshi accounts as of February 2026, resulting in at least $5.5 million in bettor losses

Kalshi's response to legal challenges

• ▪Kalshi spokesperson Jacki McGavick stated that Utah's state court lawsuit does not affect Kalshi's ongoing federal litigation
• ▪Kalshi spokesperson Jacki McGavick stated that Kalshi is a national derivatives market overseen by the CFTC under federal law, asserting that individual states do not hold veto power over its exchange

Court rulings on Kalshi's Utah operations

• ▪U.S. District Judge Robert Shelby ruled in August 2026 that CFTC federal laws do not preempt Utah's state gambling laws, upholding Utah's right to enforce its gambling ban against Kalshi
• ▪An appellate court denied Kalshi's request for an injunction in September 2026, blocking the prediction market platform from operating in Utah during Kalshi's appeal

Legal actions in other jurisdictions

• ▪Law enforcement officials in Arizona are pursuing criminal charges against Kalshi regarding alleged violations of state gambling laws
• ▪Multiple states including Michigan, Ohio, Kentucky, Nevada, Massachusetts, Wisconsin, New York, and Connecticut, along with the city of Baltimore, have filed civil actions against prediction market platforms like Kalshi and Polymarket over state gambling violations

U.S. Supreme Court petition

• ▪The U.S. Supreme Court is considering whether to accept a petition regarding New Jersey's lawsuit against Kalshi over alleged illegal sports betting to resolve whether prediction market platforms fall under state authority or CFTC exclusive jurisdiction
• ▪The NFL backed New Jersey authorities in a Supreme Court petition regarding legal action against Kalshi