Utah Files Criminal Charges Against Kalshi CEO and COO Over Illegal Gambling Claims

In Brief:

• Utah prosecutors charged Kalshi and two executives with promoting illegal gambling, including allegedly allowing an undercover agent to place wagers.
• The CFTC challenged Utah’s regulatory authority, arguing that federal law grants the commission exclusive oversight of qualifying prediction market contracts.
• Kalshi previously failed to block Utah’s gambling enforcement in federal court, while criminal charges now extend to its senior executives.

Utah prosecutors have filed criminal charges against Kalshi and two executives, accusing the prediction market operator of promoting illegal gambling. According to an October 28 filing, Attorney General Derek Brown charged Kalshi CEO Tarek Mansour and COO Luana Lopes Lara with allegedly promoting illegal gambling and allowing an undercover agent to place wagers through the platform.

Utah’s Gambling Allegations Face Federal Regulatory Challenge

Brown argues that federal registration does not exempt prediction market operators from Utah’s gambling restrictions, regardless of their contract descriptions.

“Gambling is illegal in Utah, whether you place the bet, run the game, or promote it,” Brown stated.

The charges follow an October 20 civil lawsuit against Kalshi and two Susquehanna trading firms over their alleged gambling operations. That complaint identified contracts involving sports, elections, politics, and other outcomes as products allegedly violating Utah’s gambling restrictions.

State officials maintain that describing wagers as event contracts does not change their classification under state law. Meanwhile, the Commodity Futures Trading Commission sued Utah on October 27, challenging the state’s authority over federally regulated prediction markets.

The federal regulator argues that Congress granted it exclusive jurisdiction over commodity derivatives, including certain contracts linked to future events. CFTC Chair Michael Selig defended the agency’s responsibility to supervise these markets and challenge state actions conflicting with federal oversight. The commission has sued at least ten states amid disputes over whether gambling restrictions apply to federally supervised prediction contracts.

Kalshi’s Earlier Court Setback Adds Pressure

Kalshi previously sued Utah in February, requesting a federal court order preventing state officials from enforcing gambling restrictions against its platform. A judge denied that request, finding that federal law did not prevent Utah from enforcing its gambling restrictions.

The criminal case also names Mansour and Lopes Lara individually, extending the proceedings beyond allegations against the company itself. Prosecutors must establish their claims in court, and the charges do not represent findings of criminal wrongdoing against the defendants. The dispute now spans criminal allegations, civil enforcement, and federal litigation concerning the legal boundaries of prediction market regulation.