The Commodity Futures Trading Commission has expanded its extensive collection of court battles against individual states to safeguard its status as the exclusive regulatory body governing Kalshi and related prediction platform operators, targeting Utah in this latest instance.
Betting is prohibited within the state, which has actively pursued legal measures to block Kalshi’s services locally, yet the CFTC contends that federal oversight supersedes state jurisdiction.
The federal derivatives regulator has initiated a federal lawsuit to block Utah’s endeavor to prevent prediction market wagering within its borders, where wagering is prohibited by the state constitution.
The U.S. Commodity Futures Trading Commission is requesting the judiciary to halt the enforcement actions taken last week by the Utah attorney general, which aimed to bar Kalshi from providing betting services to local citizens where such activities are unlawful. Following Utah’s initial success against Kalshi in federal court, the federal regulator is intervening through its own legal action, as announced by the CFTC on Tuesday.
Event contracts offer more than just hedging and investment functions; they additionally supply society with valuable insights regarding future occurrences, remarked CFTC Chairman Mike Selig within a public announcement, which additionally reinforced his perspective regarding his agency’s exclusive mandate over forecast markets.
The tension between state legal authority and federal preemption, with Kalshi and comparable prediction platform businesses strongly supporting the federal argument, has become increasingly intricate due to contradictory verdicts delivered by different judicial bodies. Three federal circuit courts have handed down two rulings favoring states and a single ruling supporting Kalshi. Within Utah, a federal district judge ruled in favor of the state in a dispute that remains subject to appeal.
Any entity providing wagering to residents of Utah is hereby informed that wagering is unlawful in Utah and that no state statute permits such activities, stated Attorney General Derek Brown during a public address last week, where he characterized Kalshi as operating a digital gambling venue.
The CFTC is presently engaged in legal disputes with ten distinct states and has submitted legal briefs across all levels of the judicial hierarchy, all while experiencing reductions in legal personnel as the administration of President Donald Trump works to downsize American regulatory agencies.
Although Selig maintains an inflexible stance regarding the proper authority of the CFTC, a former head of the agency, Democrat Gary Gensler, submitted a legal brief to the U.S. Supreme Court contending that Selig’s interpretation is flawed and that the legislation Gensler assisted in creating was not intended to be construed in this manner. Gensler, recognized widely in digital asset communities as the former leader of the Securities and Exchange Commission, advised the highest court that the Dodd-Frank Act utilized by the agency as statutory backing did not shift regulatory control over wagering on sports from individual states to the CFTC.
Originally published at https://www.coindesk.com/policy/2026/10/27/u-s-agency-hits-utah-with-lawsuit-to-shield-kalshi-s-ability-to-offer-betting-there.
