Utah AG Files 14 Criminal Charges Against Kalshi and Co-Founders Over Alleged Illegal Gambling

TL;DR

• Utah filed 14 criminal charges against KalshiEx and co-founders Tarek Mansour and Luana Lopes Lara, including 13 felonies, over alleged illegal online gambling.
• An undercover state agent used Utah credentials to place 12 sports wagers totaling $114.87, evidence prosecutors say supports the gambling-promotion charges.
• The case escalates a wider state-federal jurisdiction fight, while the defendants retain the presumption of innocence and the CFTC separately challenges Utah’s authority over prediction markets.

Utah Attorney General Derek Brown has filed 14 criminal charges against prediction-market operator KalshiEx LLC and co-founders Tarek Mansour and Luana Lopes Lara, alleging they promoted illegal online gambling in the state. An October 28 report details 13 felony counts and one misdemeanor. The charges are allegations that must be resolved in court, not findings of guilt, escalating the legal dispute surrounding U.S. prediction markets.

Undercover Sports Wagers Form Basis of Utah’s Criminal Case

The case centers on an undercover state agent who created a Kalshi account using a Utah residential address, local phone number and local debit card. Kalshi also required the agent to confirm his location before trading. The investigator then placed 12 sports wagers across Salt Lake and Davis counties, risking $114.87 and ultimately losing $25.10. Utah prosecutors argue those transactions demonstrate online gambling promotion within the state. The criminal filing follows Utah’s separate civil case against Kalshi.

The charges include 12 counts of online gambling promotion, classified as third-degree felonies, one second-degree felony alleging a pattern of unlawful activity, and one class A misdemeanor of general gambling promotion. The state did not issue arrest warrants for Mansour or Lopes Lara. Instead, both received summonses to respond in Third District Court in Salt Lake County. The proceedings begin with formal criminal accusations rather than convictions or custodial arrests. Similar questions surfaced after Arizona filed criminal charges against KalshiEx.

The prosecution lands inside a jurisdictional conflict. Utah argues that Kalshi’s sports contracts fall under state gambling restrictions, while Kalshi maintains that its event contracts are federally regulated financial derivatives. Earlier litigation left Utah able to enforce its gambling laws while Kalshi’s appeal continued. The dispute turns on whether state gambling authority can apply to contracts traded on a federally regulated prediction market. That disagreement shaped Kalshi’s broader defense of prediction markets amid state lawsuits.

The federal-state conflict intensified one day before Utah’s criminal filing, when the Commodity Futures Trading Commission sued Utah seeking to stop the state’s civil case and investigation of Kalshi. The CFTC invoked federal supremacy and asserted regulatory authority over prediction markets. Utah’s criminal case is unfolding while the scope of state and federal jurisdiction remains contested. The charges may proceed through state court, but the defendants retain the presumption of innocence and can challenge both factual allegations and the legal basis for prosecution.