Kalshi Sues Utah Governor in Effort to Prevent Prediction Market Ban

^{Utah Gov. Spencer Cox is named in a federal lawsuit filed by Kalshi seeking to block any state effort to ban its prediction markets. (Photo: Alan Kotok / Alamy)}

Kalshi filed a lawsuit in the U.S. District Court for the District of Utah on Monday, seeking an injunction to prevent Utah officials from banning its prediction market platform.

The lawsuit specifically named Utah Governor Spencer Cox and Attorney General Derek Brown, saying that they plan to ban Kalshi based on recent comments made by the officials.

Kalshi Says ‘Imminent’ Ban Would Violate Federal Law

According to the filing, Kalshi claims that Utah “will imminently bring an enforcement action against Kalshi with the intent to prevent Kalshi from offering event contracts for trading on its federally regulated exchange.” The lawsuit cites recent interviews and an op-ed by Brown, published in the Deseret News, in which the attorney general said he plans to address prediction markets in Utah.

“Utah’s stated intent to prohibit Kalshi from operating is a form of regulation that intrudes upon the federal regulatory framework that Congress established for regulating derivatives on designated exchanges,” the lawsuit reads. “Kalshi therefore, has no option but to seek judicial relief.”

The Utah case mirrors similar legal battles Kalshi is fighting across the nation. The company is making a relatively straightforward argument that its activities are regulated only by the federal Commodity Futures Trading Commission (CFTC) under the Commodity Exchange Act (CEA), which preempts any state regulation.

Regulations, Lawmakers Skeptical of Sports Markets

But Governor Cox has joined other state-level officials and regulators in questioning whether the CEA ever intended for prediction markets to cover such a wide range of events – including sporting events – as they do now across the country.

CFTC Chair Mike Selig posted a statement on X, in which he said the agency plans to defend its jurisdiction over prediction markets. Governor Cox responded by saying that the prediction markets are "destroying the lives of families and countless Americans, especially young men."

Utah is one of only two states, along with Hawaii, that have not legalized traditional gambling. The lawsuit comes as Kalshi continues to battle regulators over creating injunctions that would prevent it from operating or offering sports-based contracts in those jurisdictions.

Among the states being sued by Kalshi are New Jersey, New York, Ohio, and Nevada. The Nevada case is moving forward, as the U.S. District Court for the District of Nevada is set to hear arguments over whether the issue should be heard in state or federal court. Should the case return to state courts, it’s likely that regulators there will win an injunction preventing Kalshi from operating in Nevada while the legal issues play out.