Utah AG Brown Files Felony Charges Against Kalshi and Two Founders

Utah has long restricted betting activities within its borders. On Wednesday, the state filed criminal charges against Kalshi, a prediction market platform, and two of its top executives.

Attorney General Derek Brown announced that prosecutors brought 14 felony counts against the company and its co-founders. The charges include 13 counts for violating the state’s ban on gambling and one count for profiting from an illegal activity.

The charging documents name CEO Tarek Mansour and COO Luana Lopes Lara. Brown said the company continued to operate in Utah after a federal court ruled that state gambling laws apply to it. "Gambling is illegal in Utah, whether you place the bet, run the game, or promote it," Brown said. "Calling it a ‘prediction market’ doesn’t change what it is, and being federally registered doesn’t put a company above the law," he added.

Kalshi responded by calling the charges a "crazy overreach." The company stated that Utah is playing politics and expects to stop the case in court, similar to its victory in Arizona. The firm maintains that prediction markets fall under federal jurisdiction, not state gambling regulations.

This legal battle is part of a wider conflict between states and the federal government. The Commodity Futures Trading Commission, which regulates financial markets, has sued at least 10 states to stop them from regulating these platforms. Litigation is now active in roughly 20 states. Legal analyst Daniel Wallach noted that Utah’s use of felony charges marks a shift from the civil actions most states have used so far.

In February, Kalshi sued Utah to block the state from enforcing its gambling restrictions. A federal judge denied that request, ruling that the Commodity Exchange Act does not prevent Utah from applying its own laws. The 10th U.S. Circuit Court of Appeals in Denver recently declined to halt enforcement while the company appeals.

Last week, Utah filed a separate civil suit in state court. That case asks a judge to stop Kalshi from trading on sports, elections, politics, culture, and other outcomes in the state. The attorney general’s office also requested that the defendants surrender their profits from Utah operations and use a court-approved geolocation provider to block users.

Arizona became the first state to file criminal charges against Kalshi earlier this year, though a judge paused that case. Wallach expects other states to follow Utah’s lead with criminal complaints. The next step in the Utah matter is the state’s determination of specific criminal penalties, which may include jail time for the defendants.