Utah sues Kalshi over prediction market betting
- Utah Attorney General Derek Brown has sued Kalshi and Susquehanna entities over alleged illegal gambling.
- The complaint seeks to stop the betting activity and recover profits and damages.
- The case challenges how prediction markets operate under Utah’s longstanding gambling restrictions.
Utah Attorney General Derek Brown has sued Kalshi and Susquehanna entities, alleging their prediction markets violate state gambling laws.
The complaint alleges Kalshi offered sports-related event contracts to Utah residents despite the state’s constitutional prohibition on gambling.
The state seeks “to halt their illegal conduct, pull back Defendants’ illegally obtained profits, and compensate the State and its citizens for the harms Defendants have caused,” according to the complaint.
The lawsuit names Kalshi Inc, KalshiEX, Kalshi Klear entities, Kalshi Trading and Susquehanna International Group affiliates as defendants.
The complaint alleges that Kalshi’s event contracts function like traditional bets, with users purchasing positions on whether specific outcomes will occur.
Under the described model, contracts generally trade between $0.01 and $0.99 and settle at $1 for correct outcomes or $0 for incorrect ones.
The filing also alleges that Kalshi Trading and Susquehanna entities act as market makers, taking opposing positions to users’ trades and supporting contract liquidity.
The lawsuit places prediction markets under renewed legal scrutiny in Utah, but the complaint’s allegations remain unproven and the court’s final decision will determine the case’s outcome.
