Federal agency files suit to stop Utah from banning Kalshi
The CFTC argues federal law gives it sole authority over prediction markets, making Utah the tenth state sued in this dispute.
By Aiko Brooks ·
The Commodity Futures Trading Commission (CFTC) has filed a lawsuit against Utah to prevent the state from enforcing its gambling ban against the prediction market Kalshi. This legal move makes Utah the tenth state the federal agency has taken to court over the issue. The agency acts as the primary regulator for these markets at the federal level.
The conflict began when Utah filed a lawsuit in state court last week. State officials are asking a judge to stop Kalshi from offering bets on sports, elections, and political events. Utah law prohibits gambling, and state leaders argue Kalshi’s product fits that definition exactly.
Utah Attorney General Derek Brown, a Republican, described the company’s operations in direct terms. “Kalshi runs an online casino in Utah and calls it a prediction market. That violates Utah law,” Brown said last week. He noted that Utah is one of only two states with a constitutional ban on gambling. “For 130 years, Utah has been clear: gambling has no place here, and we will enforce our laws,” Brown added.
This is not the first legal battle between the two sides. Kalshi previously filed a preemptive lawsuit in federal court to stop Utah from enforcing its gambling laws. Utah won that case. Now the state is pursuing its own enforcement action while also defending against the new CFTC suit.
The CFTC announced the action on Tuesday, stating it is suing to block Utah from using state law to shut down CFTC-registered contract markets. The commission argues that Utah’s approach interferes with exchanges it has registered. It claims federal law preempts state law in this area, giving the agency sole authority over such markets.
The outcome of this case could affect other companies. If Utah wins against Kalshi, it may create problems for Polymarket, Kalshi’s main rival. It could also impact sports betting sites like DraftKings and FanDuel. Both sites are registered with the CFTC and advertise availability in all US states, including Utah, through a mix of products including prediction-market platforms.
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