Kalshi, cofounders hit with criminal charges in US state of Utah

The state of Utah has brought criminal charges against Kalshi, a well-known prediction market platform, along with its cofounders, Tarek Mansour and Luana Lopes Lara. The accusations center on the illegal promotion of online gambling activities.

On Wednesday, Utah Attorney General Derek Brown filed the charges, just a day after the Trump administration initiated a lawsuit against Utah to prevent the state from pursuing civil enforcement actions against Kalshi.

A criminal complaint lodged in a Salt Lake City court claims that Kalshi enabled an undercover law enforcement officer to place bets on various sports events, including National Football League (NFL) games. This action follows a ruling by a federal judge in August, which affirmed Utah's right to enforce its strict anti-gambling laws against online prediction markets. This decision came after Kalshi attempted to challenge the enforcement of those laws.

The complaint outlines 12 counts related to the promotion of online gambling, one count for general gambling promotion, and an additional count for a pattern of unlawful activity. As of now, neither Kalshi nor the office of Attorney General Brown has provided a response to media inquiries regarding the charges.

Utah is known for having some of the most stringent gambling laws in the United States, with its state constitution explicitly prohibiting lawmakers from legalizing gambling activities. The recent charges signify an intensifying conflict between state governments and the federal administration concerning the oversight of prediction markets.

On the previous Tuesday, the Commodity Futures Trading Commission (CFTC) filed a lawsuit aimed at blocking Utah's enforcement actions against prediction markets, asserting that these platforms should fall under federal jurisdiction. This legal maneuver came after Utah had filed a civil lawsuit the week before, accusing Kalshi of enabling betting on sports, elections, and other events in contravention of the state's anti-gambling statutes.

Numerous states across the US, governed by both Republican and Democratic leadership, have contended that the CFTC lacks the authority to oversee prediction markets. Last month, New Jersey took the matter to the US Supreme Court, asking for a ruling on whether state or federal authorities hold jurisdiction over sports betting conducted through prediction market platforms.