The suit aims wants Kalshi to cease operations in the state and pay for the harm it has caused since at least September 2024
Utah is suing prediction market website Kalshi, claiming that Kalshi’s yes/no event contracts are ‘indistinguishable from the bets offered by a traditional sportsbook.’
The suit, filed October 20 by Utah Attorney General Derek Brown, states that Kalshi functions the same way as ‘the manager of a back-alley gambling den.’ It is pushing to force Kalshi to cease operations in the state and pay for the harm it has caused since at least September 2024.
It added that Kalshi’s conduct of ‘operating, marketing, and profiting from illegal gambling activities’ constitutes a ‘public nuisance’ that is interfering with the state’s public safety, public peace and public welfare.
Brown said: “We’re also asking the court to make the defendants give up the profits that they have made, to pay restitution, and to be accountable for the public nuisance that they have caused here in the state of Utah.”
He estimates that Kalshi has made $30,591,600 to $61,183,200 in ‘illegal wagers’ made by state-based accounts with Utah residents’ losses to be around $5.5m.
“From a user’s perspective, Kalshi’s online gambling bets are indistinguishable from the bets offered by a traditional sportsbook,” the suit states. “The State of Utah is a sovereign state that is suffering and will continue suffering both imminent and substantial sovereign harms and financial injury directly traceable to (Kalshi)’s illegal gambling activities.”
“The illegal wagers that (Kalshi enterprises) offer to Utah residents under the guise of ‘event contracts’ are indistinguishable from traditional forms of gambling, including bets offered through sportsbooks. These illegal wagers violate Utah’s prohibitions on gambling, fringe gambling and related conduct,” the suit states. “Although (Kalshi enterprises) are well aware that sports bets and other forms of gambling bets are illegal under Utah law, (Kalshi) chose to begin offering gambling bets to Utah’s residents by at least September 2024, something they continue doing despite a recent federal court order rejecting KalshiEx’s argument that it is not bound by Utah law.”
“For other companies that are operating here in Utah, I would ask two things,” Brown said. “Number one, read this complaint, and number two, we’re simply asking you to follow the law.”
Kalshi stated it was a federally regulated financial exchange, ‘like the stock market.’
“Kalshi answers to federal law, and no single state should have a veto over it.”