Utah files criminal charges against prediction market Kalshi and company co-founders

Utah has filed criminal charges against prediction market operator Kalshi and two of its executives, alleging violations of the state's gambling ban and involvement in illegal activity. The felony charges mark a new approach by states seeking to regulate the rapidly growing prediction markets industry, potentially leading to a significant Supreme Court showdown.

The charges include 13 counts of violating Utah's anti-gambling laws and another charge regarding profiting from illegal activity. The state's charging documents name Kalshi and its co-founders, CEO Tarek Mansour and COO Luana Lopes Lara. Utah Attorney General Derek Brown stated that Kalshi has persisted in operating within the state despite a federal court ruling that Utah's gambling laws apply to the company.

Brown emphasized that "gambling is illegal in Utah, whether you place the bet, run the game, or promote it." Kalshi's statement labeled the charges as a "crazy overreach," accusing Utah of playing politics and asserting that the company will appeal the case in court, as it did in Arizona. The battle between states and the federal government over regulation of prediction markets has unfolded in approximately 20 states, resulting in a complex legal landscape that analysts predict will be resolved by the Supreme Court.

Kalshi maintains that prediction markets are exclusively under federal jurisdiction and not subject to state gambling laws.