Utah has become just the second-ever US state to file criminal charges against Kalshi – as well as Co-Founders Luana Lopes Lara and Tarek Mansour – consisting of a second-degree felony charge, 12 third-degree felony counts and one Class A misdemeanor.
The second-degree felony relates to Kalshi’s “pattern of unlawful activity in Utah,” while the third-degree charges are on the count of online gambling promotion and the Class A misdemeanor relates to general gambling promotion.
If convicted, Mansour and Lopes would face up to 15 years in prison on the second-degree felony count, up to five years on each of the 12 third-degree felony counts and 364 days in jail for the Class A misdemeanor charge.
The criminal charges were filed after a Utah investigator managed to open an account on Kalshi, verify his Utah location and place wagers on 12 different sporting events. Utah alleges Kalshi knowingly continued to offer the trades despite the customer residing in a state where sports betting is illegal.
“This is a crazy overreach; Utah is clearly playing politics. We look forward to putting a stop to this in court, just like we did in Arizona,” Kalshi said.
In March, Arizona became the first US state to file criminal charges against Kalshi, including a 20-count misdemeanor filing in Maricopa County Superior Court.
Arizona Attorney General Kris Mayes alleged Kalshi ran an illegal gambling business in the state and unlawfully accepted wagers on elections.
Previously, the State of Utah filed a lawsuit against Kalshi on October 20 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.”
In response, the Commodity Futures Trading Commission (CFTC) sued Utah and Attorney General Derek Brown in Federal court, seeking to stop the enforcement of state gambling laws against prediction markets.
“Gambling is illegal in Utah, whether you place the bet, run the game or promote it. Calling it a ‘prediction market’ doesn’t change what it is, and being federally registered doesn’t put a company above the law,” Brown said.
“A federal court has already ruled that Utah’s gambling laws apply to Kalshi. Kalshi kept taking bets from Utahns anyway. That is illegal, and we’re putting a stop to it.”
Kalshi’s emergency motion for injunction in Utah was originally denied by the 10th Circuit US Court of Appeals in September, opening the door for state regulators to begin enforcing anti-gambling laws against the operator.
The NBA announced partnerships with Kalshi and Polymarket on October 26, naming both as its preferred platforms and granting them access to official league data and intellectual property rights
