Utah has filed 14 criminal charges against prediction market platform Kalshi and its co-founders, accusing them of promoting illegal online gambling. The case follows an undercover investigation in which an agent placed 12 sports bets on the platform.
The charges include 13 felonies and one misdemeanor. According to investigators, the agent wagered a total of $114.87 and lost $25.10 overall.
The investigation was carried out by Scott Eggerman, an agent with the Utah Attorney General’s Office. In September, he opened a Kalshi account using a Utah address, local phone number and debit card. After verifying his location, he placed bets on NFL and college football, baseball, soccer and hockey games.
One of the bets involved a September 19 football game between the University of Utah and Utah State. The agent wagered $5 that Utah would win by more than 27.5 points. Utah won by 36 points, earning him a reported profit of $4.13. Prosecutors also said Kalshi collected fees ranging from three cents to 78 cents on individual trades.
Each of the 12 bets forms the basis of a third-degree felony charge for online gambling promotion. Prosecutors also filed a second-degree felony count alleging a pattern of unlawful activity and a misdemeanor charge related to general gambling promotion. The state issued court summonses to CEO Tarek Mansour and co-founder Luana Lopes Lara rather than seeking arrest warrants.
Utah Attorney General Derek Brown argued that calling the platform a prediction market does not change the nature of its activities. He said federal registration does not exempt Kalshi from the state’s gambling laws.
Kalshi rejected the allegations, calling the prosecution an overreach and saying it expects to defeat the charges in court. The company operates a federally regulated exchange where users trade contracts tied to outcomes involving sports, elections and economic events. It argues that these contracts fall under federal commodities law rather than state gambling rules.
The criminal case follows a separate civil lawsuit filed by Utah on October 20. In that case, the state is seeking between $30.6 million and $61.2 million in allegedly unlawful trading fees linked to more than three billion wagers associated with Utah accounts through October 19. Utah is also seeking the return of alleged profits and restrictions on residents’ access to certain event contracts.
The legal dispute has already produced several court decisions. On August 4, a federal judge ruled that federal commodities law did not prevent Utah from enforcing its gambling laws against Kalshi. On September 8, the Tenth Circuit denied the company’s request for emergency protection, allowing state enforcement to continue while its appeal remained pending.
The Commodity Futures Trading Commission (CFTC) entered the dispute on October 27 by suing Utah over its enforcement actions against federally registered prediction markets. The agency argues that federal law gives it exclusive authority over the contracts covered by its regulations. Utah maintains that its gambling laws still apply.
Other states are pursuing similar cases. Arizona filed criminal charges against Kalshi in March, but a federal judge later blocked the prosecution, and the state appealed. Nevada secured a preliminary injunction against Polymarket in June over alleged unlicensed wagering, while New York sued the platform in September.
The growing number of cases reflects an ongoing legal battle over whether prediction markets offering sports-related contracts should be governed by federal commodities regulations or state gambling laws.