Utah Attorney General Derek Brown filed a state-court lawsuit against Kalshi and affiliated companies on October 20, seeking to stop the platform from offering event contracts to Utah residents. The action alleges Kalshi is operating illegal gambling in a state that prohibits it, and asks the court for injunctions, restitution and damages.
Utah seeks injunctions and damages
The complaint seeks an order barring Kalshi’s offerings to Utah residents, alongside monetary remedies tied to the state’s allegations. Brown’s office contends that the contracts amount to unlawful gambling under Utah law.
The state action follows a separate federal-court dispute over whether federal commodities law displaces Utah’s restrictions when applied to Kalshi’s sports-related contracts. Utah is now pursuing state-law enforcement relief directly against the company and its affiliates.
Complaint cites Utah account and wager figures
Utah’s complaint alleges about 55,800 accounts registered in the state and more than 5 million wagers placed by Utah-based users by February 25, 2026.
Utah estimates that Kalshi collected between $30.6 million and $61.2 million in fees from Utah accounts, according to KSL.com .
The report said Utah residents suffered at least $5.5 million in gambling losses. The figures support the state’s request for restitution and damages.
An image accompanying KSL’s report on Utah Attorney General Derek Brown’s lawsuit against Kalshi. — Source: KSL.com
Federal court rejected preemption argument
On August 4, a federal judge granted Utah summary judgment on the key preemption question. The court held that the Commodity Exchange Act does not preempt Utah’s anti-gambling laws as applied to Kalshi’s sports contracts, according to the District of Utah ruling .
Kalshi has appealed that decision. The new state-court complaint seeks immediate state-law remedies while that appeal remains pending.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
