CFTC Sues Utah Over State Ban Aimed at Kalshi

The Commodity Futures Trading Commission filed suit against Utah on Tuesday to stop the state from enforcing its gambling ban against the prediction market Kalshi.

The complaint makes Utah the tenth state the CFTC has sued over the issue. It follows a lawsuit Utah filed in state court last week seeking to bar Kalshi from offering contracts on sports, elections, politics and other events. Utah prohibits gambling, and state officials say Kalshi's product falls under that prohibition. Federal law, the commission argues, preempts state law in this area, giving the CFTC sole authority over registered contract markets.

Utah Attorney General Derek Brown, a Republican, said last week that "Kalshi runs an online casino in Utah and calls it a prediction market. That violates Utah law." He noted that Utah is one of only two states where gambling is also banned under the state constitution, adding, "For 130 years, Utah has been clear: gambling has no place here, and we will enforce our laws."

Kalshi previously filed a preemptive lawsuit in federal court to stop Utah from applying its gambling laws to the company, and Utah won that case. The state now has to defend its enforcement push in state court while also responding to the CFTC's complaint.

The commission said Utah's approach interferes with exchanges it has registered and obstructs a decision made by Congress. The CFTC registered DraftKings and FanDuel, which advertise availability in all US states through products including prediction-market platforms in states like Utah.

A Utah victory against Kalshi could also affect its rival Polymarket, along with DraftKings and FanDuel. Both sports betting sites are registered with the CFTC, placing them in the same category of federally regulated operators the agency says Utah cannot target with state gambling laws.