Kalshi has filed a lawsuit in the US District Court of Utah following what the operator described as an “intrusion” into the federal government’s authority to oversee prediction market platforms regulated by the Commodity Futures Trading Commission (CFTC).
“Kalshi believes the Governor of Utah and the Attorney General’s Office of Utah will imminently bring an enforcement action against Kalshi with the intent to prevent Kalshi from offering event contracts for trading on its federally regulated exchange,” the filing said.
“In threatening to enforce Utah’s anti-gambling laws against Kalshi, defendants are impermissibly intruding on the CFTC’s exclusive authority to regulate futures trading on CFTC-regulated exchanges.”
On February 17, Utah Governor Spencer Cox publicly criticized CFTC Chairman Michael Selig over the legality of sports-related prediction markets, rejecting the CFTC’s position that such markets fall under federal derivatives regulation.
“Mike, I appreciate you attempting this with a straight face, but I don’t remember the CFTC having authority over the ‘derivative market’ of LeBron James rebounds. These prediction markets you are breathlessly defending are gambling – pure and simple,” Cox said on social media.
“They are destroying the lives of families and countless Americans, especially young men. They have no place in Utah. Let me be clear, I will use every resource within my disposal as Governor of the sovereign state of Utah, and under the Constitution of the US to beat you in court.”
The lawsuit also names Utah Attorney General Derek Brown and three fellow legislative leaders, as Kalshi is seeking both a preliminary and permanent injunction from the court, as well as declaratory relief.
The operator included Cox’s social media post as supporting evidence in the federal lawsuit, also referencing an op-ed written by the Utah Governor in which he cited Kalshi by name.
Kalshi alleged that “the enforcement of preempted state law threatened by defendants’ statements” would violate the Supremacy Clause featured within the US Constitution.
Three class action cases against Kalshi became one on February 10, with the similar arguments now consolidated under one new case filing, known as ‘In re Kalshi Sports Prediction Market Litigation’
