Utah charges Kalshi and its founders, escalating a fight over who can regulate prediction markets

Utah has filed criminal charges against prediction market operator Kalshi and two of its founders, escalating a dispute over which entity can regulate the fast-growing industry. The felony charges accuse Kalshi and its co-founders, CEO Tarek Mansour and COO Luana Lopes Lara, of violating the state's prohibition on gambling and profiting from illegal activity.

Utah Attorney General Derek Brown stated that Kalshi has continued operating in the state despite a federal court ruling that Utah's gambling laws apply. Kalshi called the charges a "crazy overreach" and said Utah is "playing politics." The charges could set a precedent for how states attempt to regulate the markets, potentially leading to a Supreme Court showdown.

Kalshi maintains that prediction markets fall under federal jurisdiction and are not governed by state gambling laws, a position supported by the Commodity Futures Trading Commission, which has sued at least 10 states that attempt to regulate prediction markets.