Utah Files Criminal Charges Against Kalshi and Co-Founders

• The Utah Attorney General’s Office has filed criminal charges against Kalshi co-founders Tarek Mansour and Luana Lopes Lara
• A Kalshi spokesperson describes the charges as a “crazy overreach”
• An attorney general investigator successfully created a Kalshi account and placed money on the outcome of sports events

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The state of Utah has filed criminal charges against prediction market company Kalshi and its co-founders, Tarek Mansour and Luana Lopes Lara, alleging an undercover investigator for the Utah Attorney General’s Office successfully registered a Kalshi account in the state and used it to trade several sports event contracts.

According to the filed charges, Mansour and Lopes Lara each face a second-degree felony count of pattern of unlawful activity, 12 counts of online gambling promotion, a third-degree felony, and a count of general gambling promotion, also a third degree felony.

“Gambling is illegal in Utah, whether you place the bet, run the game, or promote it. Calling it a ‘prediction market’ doesn’t change what it is, and being federally registered doesn’t put a company above the law. A federal court has already ruled that Utah’s gambling laws apply to Kalshi. Kalshi kept taking bets from Utahns anyway. That is illegal, and we’re putting a stop to it,” Attorney General Brown said.

Investigator Places Several Sports Event Trades

A Kalshi spokesperson described the charges as “a crazy overreach” to Sports Betting Dime.

“This is a crazy overreach; Utah is clearly playing politics. We look forward to putting a stop to this in court, just like we did in Arizona,” the spokesperson told Sports Betting Dime.

According to the filed charges, a Utah Attorney General’s Office investigator, Scott Eggerman, used a Utah-based IP address to create an account with Kalshi and successfully trade several sports event contracts on various games played across the country. He successfully traded a number of sports event contracts on the outcome of NFL, MLB, MLS, NHL, and NCAA men’s football matchups in September.

The investigator successfully placed 12 wagers in Utah using his Kalshi account in late September. Each transaction resulted in a fee deducted from Eggerman’s account. According to the state, from Sept. 13, 2026, through Sept. 26, 2026, Kalshi “derived an economic benefit other than personal winnings from the facilitation of multiple gambling wagers placed on its platform by Agent Scott Eggerman while he was in Salt Lake County and Davis County, Utah, and aided Agent Eggerman in completing those gambling wagers, and knowingly owned and controlled the Kalshi online platform in the state of Utah.”

Utah is one of just two states in the country to not have any legalized form of gambling.

Utah, the federal government, and Kalshi have engaged in legal back-and-forth over the last several months regarding the regulation of event contracts and alleged illegal gambling in the state.

Back and Forth in Utah

In September, the U.S. 10th Circuit Court of Appeals denied Kalshi’s emergency motion for injunction pending appeal, essentially allowing Utah to enforce its gambling laws against the company.

The U.S. Circuit Court of Appeals denial came a little more than one month after U.S. District Judge Robert J. Shelby denied Kalshi’s motion for a preliminary injunction after the prediction market operator filed a lawsuit earlier this year to prohibit the state from enforcing its anti-gambling laws against its event contract offerings.

Things kicked back up after Utah Attorney General Derek Brown sued Kalshi for alleged illegal gambling in the state one week ago.

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.

In response, the Commodity Futures Trading Commission (CFTC) sued Utah and Attorney General Brown to block state gaming law enforcement of prediction market contracts.

The state’s effort to restrict 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.”

Not the First Criminal Charges Filed by a State

Utah’s decision to file criminal charges against Kalshi is not the first state to decide to do so.

In March, Arizona Attorney General Kris Mayes filed criminal charges against Kalshi in Maricopa County Superior Court, alleging the company operatred an illegal gambling business in the state without a license.

The charges came four days after Kalshi filed a preemptive lawsuit against Mayes and several key Arizona Department of Gaming officials.

“Kalshi may brand itself as a ‘prediction market’ but what it’s actually doing is running an illegal gambling operation and taking bets on Arizona elections, both of which violate Arizona law,” Mayes said in a released statement.

Attorney General Mayes accused Kalshi of 20 criminal counts. The counts allege Kalshi accepted bets from Arizona residents on a wide range of events, including professional and collegiate sports, prop bets on individual player performances, and whether the SAVE Act would become law. Additionally, the charges also included four counts of election betting, including bets on the 2028 presidential race, the 2026 Arizona gubernatorial race, the 2026 Arizona Republican gubernatorial primary, and the 2026 Arizona Secretary of State race.

However, a federal judge blocked Arizona’s criminal charge case against Kalshi in May, concluding that federal law preempts the state from enforcing its gambling laws against sports event contracts.