Utah Attorney General Brown Sues Kalshi For Alleged Illegal Gambling

• Utah Attorney General Derek Brown filed a lawsuit against Kalshi for alleged illegal gambling in the state
• The lawsuit notes Kalshi has collected between $30 million to $61 million in fees from Utah users
• The state is requesting a cessation of Kalshi sports event contracts, return of profits, and compensation for harm

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Utah Attorney General Derek Brown filed a lawsuit Tuesday against prediction market company 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.

Millions Traded in Utah

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.

Jacki McGavick, a Kalshi spokesperson, told Sports Betting Dime that Kalshi answers to federal law.

“Kalshi is a federally regulated financial exchange, like the stock market. Our customers trade with each other and set the prices. As a national derivatives market overseen by the CFTC, Kalshi answers to federal law, and no single state should have a veto over it. This latest state court action does not affect our ongoing federal litigation,” she said.

Kalshi Took Legal Action Against Utah First

Brown noted in his press conference that Kalshi took legal action against the state first. Kalshi sued Utah Gov. Spencer Cox and Brown in U.S. District Court earlier this year, after the two publicly expressed opinions that Kalshi was operating illegally under Utah’s anti-gambling laws and would likely take legal action against the company for its offerings.

Kalshi noted multiple times in its lawsuit against that took action before the state took legal action of its own against the company. Kalshi pointed to comments made by Gov. Cox in a Bloomberg article in which he said “I think you’re going to see 50 states suing these guys in one way or another” and that businesses like Kalshi are “illegal in Utah and will continue to be so.”

They also expressed concern over a recent op-ed written by Brown in Deseret News, in which the attorney general reference Kalshi by name and “stated he has a plan to address prediction markets operating in the state.” The lawsuit also believes that Brown’s views in the op-ed clearly show he believes their offerings to be illegal.

Kalshi, in the lawsuit, claimed it tried to contact Utah’s attorney general to inquire if the state was preparing to take action against the company for its prediction market services, but its inquiries were never returned.