Utah files lawsuit against Kalshi for ‘brazen pattern of unlawful conduct’

The State of Utah has filed a lawsuit against Kalshi for what legislators described as a “brazen pattern of unlawful conduct,” believing the operator functions in a similar fashion to “the manager of a back-alley gambling den.”

“Today we are asking the court to stop sports, politics, elections, culture and mention bets here in Utah, and to use a court-approved geolocation provider to enforce this,” Utah Attorney General Derek Brown said. 

“We are also asking the Court to make the defendants give up the profits that they have made, to pay restitution and to be accountable for the public nuisance that they have caused here in the State of Utah."

Within the complaint filed on October 20, Utah estimates that Kalshi has earned between $30.6m and $61.2m in trading fees from bets placed within the state, while residents have reportedly lost $5.5m in individual wagers. 

Utah also claimed the operator is “administering a closed-loop wagering system, where it creates the games, handles the bets and pays out the winners.”

As confirmed by Attorney General Brown, the state requested that Kalshi be prohibited from offering event contract trading to residents and pay back the revenue made through its prediction market platform in Utah.

The state believes Kalshi’s event contracts are “indistinguishable from the format of bets offered through any sportsbook,” such as proposition bets, parlays and moneyline or spread wagers. 

Previously, Kalshi filed a lawsuit against Utah regulators in preparation of state legal action, only to see the court rule in favor of lawmakers during August.

The operator then filed for an emergency injunction on August 16 but was denied in its attempt to circumvent state enforcement in September. 

Global Gaming Insider previously analyzed Utah’s strict mandates for gambling, as well as the effect the state’s undefined path could have on the US’ regulatory balance.