Utah officials have brought felony criminal charges against prediction market Kalshi and its two co-founders for allegedly illegally offering gambling to the state’s residents.
Tarek Mansour and Luana Lopes Lara each face one count of pattern of unlawful activity, a second-degree felony; 12 counts of online gambling promotion, a third-degree felony; and one count of general gambling promotion, a Class A misdemeanor. All gambling is illegal in Utah.
Utah also recently filed a civil lawsuit against Kalshi, seeking to prevent it from offering Utah residents betting opportunities on sports, elections, and other events.
A special agent with the Utah State Bureau of Investigations signed up for an account on Kalshi as a fictional Utah resident and says he was allowed to place bets on several football games.
“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,” Utah Attorney General Derek Brown said in a statement. “A federal court has already ruled that Utah’s gambling laws apply to Kalshi. Kalshi kept taking bets from Utahns anyway.”
Kalshi officials responded to the criminal charges by calling them “a crazy overreach” and accused state officials of “playing politics.”
Kalshi is facing lawsuits from other states, such as New York, but those involve Kalshi allegedly failing to comply with online gambling rules or failing to fulfill tax obligations, Isaac Rose-Berman, a gambling policy fellow at the American Institute for Boys and Men, told Salt Lake City’s ABC affiliate. Utah, on the other hand, bans all gambling and marketing of the practice outright.
Meanwhile, the federal government has joined the fray. The Trump administration is suing Utah for trying to ban Kalshi in the state; it’s the 10th state the administration has sued for regulating prediction markets. In its suit, the federal government argues that the Commodity Futures Trading Commission has authority to regulate prediction markets like Kalshi, rather than individual states.
Kalshi bills itself as a prediction market, not a gambling site, and allows people to wager money on everything from “Who will control the Senate?” to who will win the latest season of Dancing with the Stars. And, of course, Kalshi offers wagers on professional sports games, college sports, and even chess matches. Kalshi’s website had nearly 20 million visits in September, according to Semrush.
