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Utah Attorney General Derek Brown filed a civil lawsuit on October 20, 2026, against Kalshi, its affiliates and two trading companies tied to Susquehanna, alleging the prediction market platform has run illegal betting in the state since 2024, Cointelegraph reported. At a Tuesday briefing, Brown said the state had asked a court to force the companies to hand back roughly $30 million to $60 million in profits from event contracts Utah considers unlawful.
The action was filed in Utah’s Third District Court, according to Cryptobriefing. Utah alleges the companies kept offering sports and event contracts to state residents after a federal judge confirmed the state’s right to enforce its gambling ban. More than 32,000 verified accounts belong to Utah residents, and estimated fees from those users run between $30.6 million and $61.2 million, per Cryptobriefing.
Also read: Judge denies CFTC emergency motion to halt New York enforcement case against Kalshi
Key facts
- Cointelegraph reported that Brown described Kalshi as a public nuisance causing “a significant and substantial ongoing harm” to a significant number of Utahns.
- The state says Kalshi served more than 32,000 users in Utah; Cryptobriefing specifies these are verified accounts registered to state residents.
- Utah seeks an injunction cutting off residents’ access, restitution for losses, disgorgement of profits and a declaration that the platforms are a public nuisance, Cryptobriefing reported.
- On August 4, 2026, a federal court ruled that the Commodity Exchange Act does not override Utah’s gambling prohibitions as they apply to sports-related contracts, per Cryptobriefing.
- On September 8, 2026, the 10th Circuit denied Kalshi’s request for an injunction pending appeal, clearing the way for state enforcement while the appeal continues, Cryptobriefing reported.
A state case built on a federal loss
The sequence matters. Kalshi went to federal court in February 2026 to challenge Utah’s law before enforcement began, and lost on the preemption question in August; the appeals court then declined to pause that ruling in September. Utah’s new suit moves the fight to its own courts and widens the target list.
Brown said the state is asking the court to stop sports, elections, politics, culture and mention bets in Utah, according to Cointelegraph. Cryptobriefing characterized the filing as taking the dispute out of federal court and into the state’s own.
Also read: Washington court orders Kalshi to halt sports, election, and politics prediction markets
Why the market makers are included
Naming Susquehanna-affiliated firms is the suit’s less usual element. In a prediction market, market makers keep contracts liquid enough for users to open and exit positions. Utah’s theory, as Cryptobriefing described it, is that betting at this volume could not have continued without those firms supplying liquidity — making them active participants rather than passive counterparties. Cointelegraph also noted that Kalshi did not respond immediately to a request for comment.
The wider map of state suits
Utah’s filing joins a growing set of state actions against prediction market operators. Arizona remains the only state pursuing criminal charges against Kalshi, while Michigan, Ohio, Kentucky, Nevada, Massachusetts, Wisconsin and New York have brought civil suits against one or more prediction market companies, Cointelegraph reported. The Supreme Court is weighing whether to take up New Jersey’s case against Kalshi, a decision that could settle whether the CFTC’s claimed exclusive jurisdiction over event contracts displaces state gambling law.
Why it matters
Prediction markets have grown on the argument that their contracts are federally overseen financial instruments rather than wagers under state law. A federal court rejecting that preemption argument in Utah, followed by this state-level suit, weakens that position and gives other states a template. The market-maker angle adds a second layer: if liquidity providers are treated as participants in allegedly unlawful betting, they may reassess where they supply it, which affects users well beyond Utah.
What to watch
Two events will shape what follows: whether the Supreme Court accepts New Jersey’s petition, which could resolve the state-versus-CFTC question nationally, and how the Utah court handles the injunction and disgorgement requests while Kalshi’s appeal at the 10th Circuit continues.
Reported by cointelegraph.com.
Sources: Cointelegraph, Cryptobriefing