CFTC Sues Utah to Block State Enforcement of Sports Event Contracts

• The Commodity Futures Trading Commission has filed a lawsuit against Utah
• Litigation seeks to block Utah gambling laws to prohibit sports event contracts
• The commission has filed similar lawsuits in nine other states

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The Commodity Futures Trading Commission is suing the state of Utah and Attorney General Derek Brown to block state gaming law enforcement of prediction market contracts.

The commission’s decision to sue the state is in response to Brown filing a lawsuit against Kalshi to block the trade of several event contract markets in Utah. The state’s effort to restrict Commodity Futures Trading Commission (CFTC)-registered exchanges obstructs Congress’s decision to federally preempt state law, the commission noted.

“Utah seeks to shut down prediction markets across a wide variety of markets,” CFTC Chairman Michael S. Selig said in a release. “Event contracts do not just serve hedging and investment purposes – they also provide the public with information about the outcome of future events. Congress entrusted the CFTC to be the federal regulator with sole responsibility to oversee these markets. As I’ve said before, the CFTC has the expertise and responsibility to defend its exclusive jurisdiction over commodity derivatives, and that’s exactly what we’ll do.”

Blocking State Enforcement

The CFTC has filed similar lawsuits in nine other states seeking to prohibit enforcement of event contracts. This particular piece of litigation has been filed in U.S. District Court for the District of Utah Central Division.

In its lawsuit, the CFTC requests a preliminary and permanent injunction against the state to prohibit state gambling laws from being applied to event contracts.

“Utah’s efforts to prevent a CFTC-regulated DCM from offering CFTC-approved financial products intrude on the exclusive federal scheme Congress designed to oversee United States commodity derivatives markets. Prompted by the evolution of national futures markets and repeated conflicts with state law, Congress enacted the CEA, granting the CFTC “exclusive jurisdiction” to regulate those markets and creating a comprehensive federal regulatory framework that preempts state laws that attempt to regulate the operation of, or transactions on, CFTC regulated exchanges,” CFTC counsel wrote in its lawsuit.

The CFTC has levied similar lawsuits against Arizona, Connecticut, Illinois, Kentucky, Minnesota, New Mexico, New York, Rhode Island, and Wisconsin.

Millions Traded in Utah

The CFTC filed its lawsuit in response to Utah Attorney General Brown’s lawsuit against Kalshi for alleged illegal gambling in the state.

Brown filed the lawsuit in the Third Judicial District Court in and for Salt Lake County, State of Utah, demanding a cessation of several Kalshi event contract markets, a return of profits, and restitution to the state and users for harm caused.

“Under Utah law, I have determined that this operation is causing a significant and substantial ongoing harm to a significant number of Utahns. So, today we are asking the court to stop sports, election, politics, culture, and mentions bets here in Utah and to use a court approved geolocation provider to enforce this. We’re also asking the court to make the defendants give up the profits they have made, to pay restitution, and to be accountable for the public nuisance that they have caused here in the state of Utah,” Brown said in a press conference broadcast by KUTV 2 News Salt Lake City.

Sports bets and other forms of gambling are illegal under Utah law, Brown noted. However, Kalshi began to offer bets to Utah residents in September 2024 and continue to do so despite several circuit court decisions saying they cannot.

According to the filed lawsuit, as of February 2026, there were 55,819 Kalshi accounts registered for users with a Utah address, with 32,940 live after completing the full sign up process. These accounts entered into more than five million wagers, with approximately $5 million worth of open positions in the state on Feb. 25, 2026. In total, Kalshi had approximately $451.29 million in open positions nationwide during the same time period.

Utah counsel estimates that as of Oct. 19, 2026, there have been more than 3,059,160,000 illegal event contracts trades placed by Utah accounts. Based on these estimates, Brown reported that Kalshi likely made between $30.59 million and $61.18 million in fees from “illegal wagers” placed by Utah accounts as of this month.

“These companies, they’re not your friends. They’re not helping you to invest. They’re not providing you with insight or opportunity. Frankly, they’re engineered to do one thing and one thing alone, that is empty your wallet. They also hijack your attention and keep you chasing losses that frankly you just can’t win back,” Brown said.

The state is seeking millions in restitution from the company in the lawsuit.