Utah Seeks $30M-$60M From Kalshi and Partners Over Alleged Illegal Betting

Utah is seeking the recovery of roughly $30 million to $60 million in profits that Attorney General Derek Brown states Kalshi and its partners generated from event contracts that the state classifies as illegal gambling, according to a lawsuit unveiled on Oct. 20, 2026. As reported by Cointelegraph, Brown is asking the court to compel the platform and associated defendants to surrender these funds.

The civil litigation targets Kalshi, its affiliates, and two Susquehanna trading companies. At its core, the lawsuit questions whether federal oversight of derivatives protects event contracts from the anti-gambling laws of Utah.

30M-$60M: Utah Targets Alleged Kalshi Betting Profits

This financial figure does not represent a punitive damages award. Instead, it is the amount Utah aims to reclaim, reflecting Brown’s calculation of the revenue produced by the contested activity.

Read More: Kalshi Risks $500,000-a-Day Fine as Michigan Court Extends Sports Market Ban

According to The Defiant, the state is also pursuing injunctions and restitution.

More Than 32,000 Utah Users Allegedly Accessed Kalshi

Brown asserts that Kalshi has enabled unlawful wagering within the state since 2024, providing access to more than 32,000 Utah residents and resulting in heavy financial losses for them.

Characterizing the situation as “significant and substantial ongoing harm” to local residents, the state wants the court to halt bets related to sports, elections, politics, culture, and mentions. Granting this request would subject multiple categories of event contracts to state-level restrictions.

Two Susquehanna Firms Face the Kalshi Lawsuit

The inclusion of two Susquehanna trading companies broadens the scope of the case beyond Kalshi and its affiliates. Utah contends that these market makers sustained the wagering activity even after Kalshi suffered a defeat in federal court.

Jacki McGavick, a spokesperson for Kalshi, defended the platform by emphasizing that it functions as a federally regulated financial exchange overseen by the Commodity Futures Trading Commission. Regarding the lawsuit, she stated, “Our customers trade with each other and set the prices.”

McGavick’s position is that Kalshi answers to federal mandates, and individual states should not hold veto power over a national derivatives market. This defense relies directly on the company’s federal regulatory standing.

August and September Rulings Preceded Utah’s New Action

Kalshi initially took legal action against Utah in February after state lawmakers enacted legislation categorizing prediction-market betting as illegal gambling.

In August, state officials secured a ruling determining that federal law under the CFTC does not preempt state gambling regulations. Following that, an appellate court denied Kalshi’s request for an injunction in September, preventing the platform from operating while the appeal moves forward.

McGavick noted that the new state-level legal action does not affect Kalshi’s ongoing federal litigation, meaning the latest financial demand functions as a separate civil enforcement proceeding added to the broader dispute over market access.

The next major development to watch is whether the U.S. Supreme Court will grant a petition stemming from New Jersey’s lawsuit against Kalshi. That conflict could bring the jurisdictional division between individual states and the CFTC before the high court, especially as the federal regulator asserts “exclusive jurisdiction” over the event contracts offered by these platforms.

?FAQ

01Which categories of Kalshi bets does Utah want the court to stop?

Brown specified sports, elections, politics, culture, and mention bets. The restrictions requested by Utah would apply to those specific markets within the state.

02When did Kalshi file its own lawsuit against Utah?

Kalshi initiated its lawsuit in February 2026, challenging Utah after state lawmakers passed legislation defining prediction-market betting as gambling.

03Which federal regulator oversees Kalshi and claims exclusive jurisdiction over its event contracts?

The Commodity Futures Trading Commission, or CFTC, supervises Kalshi as a derivatives exchange. Its stance on jurisdiction bolsters Kalshi’s argument that federal law governs its operations.

04Which state is pursuing criminal charges against Kalshi?

Arizona is pursuing criminal charges against Kalshi and was noted as the sole state taking that approach, whereas Utah’s recently announced legal challenge is civil in nature.

05Which state’s Kalshi dispute is the subject of the petition being considered by the Supreme Court?

The petition involves New Jersey’s dispute with Kalshi regarding allegedly unlawful sports wagering, and the Supreme Court is currently weighing whether to hear the case.

This article is for information only and is not financial advice.