Why It Matters
Utah Attorney General Derek Brown filed criminal charges Wednesday against Kalshi and its co-founders over alleged gambling activity involving prediction markets.
What Happened
The charging documents name Kalshi, Tarek Mansour and Luana Lopes Lara. The allegations include online gambling promotion and other unlawful activity.
The charges include 12 felony counts alleging online gambling promotion against Kalshi and its co-founders, one felony count alleging a pattern of unlawful activity, and one misdemeanor charge for general gambling promotion.
Brown said Utah’s gambling restrictions apply to those who place bets as well as those who operate or promote betting activity. “Gambling is illegal in Utah, whether you place the bet, run the game, or promote it,” Brown said.
Kalshi said it would challenge Utah in court.
By the Numbers
- 12 felony charges alleging online gambling promotion
- 1 felony count alleging a pattern of unlawful activity
- 1 misdemeanor gambling-promotion charge
- 2026, the year Utah enacted a law defining proposition bets as banned gambling
Zoom Out
The charges follow a broader legal dispute over whether prediction markets are derivatives markets or gambling operations. The Commodity Futures Trading Commission filed a legal challenge against Utah’s ban on derivatives markets.
A federal court previously allowed Utah to enforce its anti-gambling laws against Kalshi. The case involved an undercover Utah agent who placed wagers on multiple sports events using Utah geolocations. Kalshi appealed that decision, but its emergency request for an injunction was denied.
Utah Gov. Spencer Cox criticized prediction markets and CFTC Chair Mike Selig in February. Cox said the markets were “gambling – pure and simple.”
What’s Next
Kalshi’s legal challenge will proceed alongside the criminal case. In a separate matter, a federal judge permanently blocked Arizona from criminally prosecuting Kalshi, while Arizona is seeking to revive its case.
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