Utah Demands Up to $60M in Restitution
Utah Attorney General Derek Brown has launched a major legal offensive against prediction market platform Kalshi and two Susquehanna trading companies, petitioning a court to claw back between $30 million and $60 million in profits. According to Cointelegraph, the lawsuit alleges that the platform has facilitated illegal betting for more than 32,000 Utah residents since 2024.
During a Tuesday press briefing, Brown characterized the prediction market as a "public nuisance" that is "causing a significant and substantial ongoing harm" to the state's population. The state is seeking immediate injunctions to halt all wagers on sports, elections, and cultural events within its borders. The inclusion of Susquehanna in the suit targets the market makers that authorities allege helped sustain the wagering liquidity despite recent federal court defeats, as reported by The Defiant.
Federal vs. State Jurisdiction Battle Escalates
The lawsuit is the latest escalation in a bitter jurisdictional dispute. Kalshi initially sued Utah in February after state lawmakers classified prediction markets as gambling. However, a judge ruled in August that federal oversight by the Commodity Futures Trading Commission (CFTC) does not preempt state-level gambling laws. An appellate court subsequently denied Kalshi's request for an injunction in September.
Kalshi spokesperson Jacki McGavick pushed back against the state's claims, asserting that the platform operates as a federally regulated financial exchange where customers trade with each other to set prices. "As a national derivatives market overseen by the CFTC, Kalshi answers to federal law, and no single state should have a veto over it," McGavick stated.
The Utah action joins a growing wave of state-level resistance against event contracts. While Arizona remains the only state pursuing criminal charges against Kalshi, civil suits have been filed by authorities in New York, Michigan, Ohio, Kentucky, Nevada, Massachusetts, and Wisconsin. Traders monitoring these regulatory shifts often rely on Kalshi analytics tools to track market liquidity amid legal disruptions.
This aggressive state-level enforcement mirrors broader public skepticism toward event contracts. A recent Reuters/Ipsos poll highlighted by Cointelegraph revealed that 69% of Democrats and 61% of Republicans oppose betting on U.S. elections. As the Supreme Court weighs whether to intervene in a similar case out of New Jersey, the fundamental regulatory divide between state authorities and the CFTC remains the central battleground in the Kalshi vs Polymarket ecosystem.