Utah Attorney General Derek Brown is seeking to stop Kalshi from offering five categories of event contracts to state residents, escalating a dispute over state gambling law and federal derivatives oversight.
The Oct. 20 civil complaint names Kalshi Inc., KalshiEx LLC, Kalshi Klear Inc., Kalshi Klear LLC and Kalshi Trading LLC, as well as Susquehanna International Group, LLP and Susquehanna Government Products LLLP. Utah contends that sports, election, politics, culture and “mentions” contracts offered to residents amount to illegal online gambling.
The state seeks preliminary and permanent injunctions against those contracts in Utah, along with restitution, damages and the return of proceeds it alleges came from unlawful wagers. It also wants the defendants required to use a court-approved third-party geolocation provider to comply with any injunction.
Utah estimates Kalshi collected $30.6 million to $61.2 million in fees from state accounts through Oct. 19. To calculate that range, it applied Utah accounts’ estimated 1.11% share of open positions on Feb. 25 to past trading in the five challenged categories, assuming the share stayed constant and fees ran $0.01 to $0.02 per wager. The complaint says Kalshi holds the actual Utah wager count, which could put the total above or below the estimate.
A declaration attached to the complaint counted 55,819 Kalshi accounts with Utah addresses on Feb. 25; 32,940 had completed registration. The state separately estimates that Utah bettors lost about $5.5 million, using an assumed share of losses among ordinary users across the platform. It alleges that Kalshi Trading LLC and the Susquehanna firms took positions opposite retail traders as market makers.
Kalshi spokesperson Jacki McGavick said in a prepared statement provided to Utah News Dispatch that customers trade with one another on a federally regulated exchange. She said federal law governs Kalshi’s national market.
In a separate case brought by Kalshi, a U.S. District Court for Utah judge ruled Aug. 4 that the Commodity Exchange Act did not prevent the state from enforcing its gambling laws against the company. That decision did not resolve the allegations in Brown’s new complaint.
Kalshi appealed the August ruling. A Sept. 22 entry set Oct. 21 for Utah officials’ response brief, according to a Justia copy of the U.S. Court of Appeals for the Tenth Circuit docket last retrieved Sept. 28. The deadline’s current status is unverified.
