In other words, Utah has hit Kalshi with a textbook legal “one-two punch” by using both the civil and criminal court systems simultaneously.
Kalsi has previously argued that sports wagers traded on its platform aren’t gambling but a type of financial derivative subject to federal regulation under the Commodity Futures Trading Commission (CFTC), and therefore shouldn’t fall under state supervision.
Utah and several states, however, believe that prediction markets like Kalshi are subject to state gambling laws and gambling taxes.
The legal picture is messy
Utah isn’t the only state to take action. Several states, including Arizona, Connecticut, Massachusetts, Michigan, and Nevada, have already chosen to either file criminal charges, take civil action, or restrict access to the platform within their borders.
In the meantime, the Commodity Futures Trading Commission has also entered the fight, suing Utah and arguing that only Washington can regulate these contracts.
Broadly speaking, the crackdown prediction platforms extends far beyond Kalshi. States have heavily targeted decentralized crypto-betting giants like Polymarket under similar state-level gambling allegations.
