Utah authorities have filed felony criminal charges against prediction market Kalshi and its two co-founders for allegedly providing gambling services to the state’s residents, according to a report by Mashable. “Gambling is illegal in Utah, whether you place the bet, run the game, or promote it. Calling it a ‘prediction market’ doesn’t change what it is,” Utah Attorney General Derek Brown stated, citing a federal court ruling that Utah’s gambling laws apply to Kalshi despite its federal registration.
Tarek Mansour and Luana Lopes Lara are charged with one count of pattern of unlawful activity, a second-degree felony; 12 counts of online gambling promotion, a third-degree felony; and one count of general gambling promotion, a Class A misdemeanor. Utah also filed a civil lawsuit against Kalshi, seeking to block its betting opportunities on sports, elections, and events. A special agent with the Utah State Bureau of Investigations created a fictional Utah resident account and placed bets on football games, according to the report.
Charges Against Kalshi Founders
The criminal charges stem from Utah’s strict ban on all gambling, which applies to both operators and promoters. Kalshi officials called the accusations “a crazy overreach” and accused state officials of “playing politics.” The company faces similar lawsuits in other states, such as New York, but those involve compliance issues rather than outright bans. Utah’s approach is unique, as it prohibits even the marketing of gambling activities.
Federal Government’s Legal Action Against Utah
The federal government has joined the dispute, suing Utah over its efforts to ban Kalshi. The Trump administration argues that the Commodity Futures Trading Commission has authority to regulate prediction markets like Kalshi, not individual states. This marks the 10th state the administration has sued for regulating such platforms. Kalshi, which allows wagers on events ranging from sports to political outcomes, reported nearly 20 million website visits in September, according to Semrush.
"In Utah, offering online gambling to anyone in the state is a third-degree felony. The court found that Kalshi’s federal registration does not put those bets out of Utah’s reach."- @AGDerekBrown pic.twitter.com/g7kbLMv6rB
“A federal court has already ruled that Utah’s gambling laws apply to Kalshi. Kalshi kept taking bets from Utahns anyway,” Brown said, highlighting the state’s enforcement stance.
More on Kalshi
My interview with Utah @AGDerekBrown, who just filed criminal charges against Kalshi: “They’ve made a bet. They bet that as a state we’re not going to enforce our laws … To the companies that are doing it, be on notice.” https://t.co/rmBlSeqiDj
