Utah has initiated criminal proceedings against prediction market platform Kalshi alongside its two co-founders, alleging that the firm unlawfully facilitates betting operations inside the state.
State prosecutors filed 14 distinct counts against KalshiEX LLC and executives Tarek Mansour and Luana Lopes Lara. The charges encompass a felony count for an alleged pattern of illegal activity, 12 counts concerning the promotion of digital gambling, and a single misdemeanor wagering charge.
CoinDesk contacted Kalshi for a statement but obtained no reply before publication time.
The prosecution’s case stems from data collected by an undercover investigator working for the Utah Attorney General’s Office, who utilized local credentials, a phone number, and a debit card to log onto the service during September.
Reports indicate that Kalshi permitted this undercover operative to execute 12 separate sports bets. State officials argue that these actions demonstrate the platform actively running unauthorized wagering services locally.
Operating as a federally overseen exchange across the United States, Kalshi enables participants to trade event contracts linked to binary real-world occurrences, including elections, sports results, macroeconomic metrics, and weather conditions.
One-two punch
This recent development arrives shortly after the Utah attorney general launched a civil suit against Kalshi to bar the enterprise from accepting wagers from local participants and to reclaim earnings generated within the jurisdiction.
Stated differently, Utah delivered a classic legal combination by deploying both civil and criminal legal channels concurrently.
Kalshi has previously maintained that the sports contracts traded on its marketplace constitute financial derivatives regulated federally by the Commodity Futures Trading Commission (CFTC) instead of gambling, meaning they ought to be exempt from state oversight.
Conversely, Utah and multiple other jurisdictions maintain that prediction platforms like Kalshi remain bound by local betting statutes and levies.
The legal picture is messy
Utah is far from alone in pursuing enforcement measures. Numerous jurisdictions—such as Arizona, Connecticut, Massachusetts, Michigan, and Nevada—have already initiated criminal complaints, launched civil lawsuits, or blocked platform access within their borders.
Meanwhile, the Commodity Futures Trading Commission has also intervened in the dispute, filing a lawsuit against Utah to protect Kalshi’s authority to provide betting services in the region.
More broadly, regulatory actions against prediction networks reach well beyond Kalshi alone. Authorities have heavily pursued decentralized crypto-wagering protocols such as Polymarket under comparable state-level betting violations.
Originally published at https://www.coindesk.com/policy/2026/10/29/utah-charges-predictions-platform-kalshi-with-illegal-gambling.
