Utah continues legal pushback against Kalshi with preliminary injunction request

The State of Utah and Attorney General Derek Brown are seeking a preliminary injunction against Kalshi that would prohibit the operator from offering event contracts tied to politics, elections, culture, sports and mentions.

Having filed the motion on October 29, Utah and Brown are also requesting the court force Kalshi to implement geofencing measures and account-based restrictions, similar to those introduced in Nevada, Washington and Michigan. 

Utah’s pushback against Kalshi has primarily focused on the operator’s sports event contracts up to this point, but it appears regulators have become motivated to restrict additional markets offered on the platform. 

Less than 24 hours before the motion was filed, Utah became 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 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.

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.

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.