Utah officials have filed criminal charges against prediction market Kalshi and its two co-founders for allegedly illegally offering gambling to state residents.
Tarek Mansour and Luana Lopes Lara each face one count of unlawful activity, a second-degree felony; 12 counts of promoting online gambling, a third-degree felony; and one count of general promotion of gambling, a Class A misdemeanor. All gambling is illegal in Utah.
Utah also recently filed a civil suit against Kalshi, seeking to prevent him from offering Utah residents betting opportunities on sports, elections and other events.
A special agent with the Utah State Bureau of Investigation opened an account on Kalshi as a fictitious Utah resident and said he was authorized to bet on several football games.
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“Gambling is illegal in Utah, whether you bet, run the game or promote it. Calling it a ‘prediction market’ doesn’t change what it is, and being federally registered does not put a business above the law,” Utah Attorney General Derek Brown said in a statement. “A federal court has already ruled that Utah’s gambling laws applied to Kalshi. Kalshi still continued to accept bets from Utahns.”
Kalshi officials responded to the criminal charges by calling them “senseless overreach” and accusing state officials of “playing politics.”
Kalshi faces lawsuits in other states, such as New York, but those involve Kalshi allegedly not following the rules of online gambling or failing to meet his tax obligations, Isaac Rose-Berman, a gambling policy researcher at the American Institute for Boys and Men, told the ABC affiliate in Salt Lake City. Utah, on the other hand, completely prohibits gambling and the commercialization of this practice.
Meanwhile, the federal government is entering the fray. Trump administration sues Utah for trying to ban Kalshi in the state; This is the 10th state the administration has sued for regulating prediction markets. In its complaint, the federal government argues that the Commodity Futures Trading Commission has the authority to regulate prediction markets like Kalshi, rather than individual states.
Kalshi bills itself as a prediction market, not a gambling site, and allows people to bet money on everything from “Who will control the Senate?” who will win the last season of Dancing with the stars. And of course, Kalshi offers betting on professional sports games, college sports and even chess matches. Kalshi’s website received nearly 20 million visits in September, according to Semrush.
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