Just days after the federal government sued Utah to stop its civil case against Kalshi, Utah Attorney General Derek Brown hit the prediction market website and co-founders Tarek Mansour and Luana Lopes Lara with criminal charges.
"A federal court has already ruled that Utah's gambling laws apply to Kalshi," Brown said in a statement. "Kalshi kept taking bets from Utahns anyway. That is illegal, and we're putting a stop to it."
It's a significant escalation in the fight between prediction markets and Utah's laws (and moral opposition) against gambling. Both Mansour and Lopes Lara could face prison time if convicted.
Thirteen felony charges and a misdemeanor were leveled against Kalshi, including one count of "pattern of unlawful criminal activity," a second-degree felony; 12 counts of "online gambling promotion" and one count of "general gambling promotion," a Class A misdemeanor.
The Utah Attorney General's timing to the Commodity Futures Trading Commission's suit against Utah is coincidental, after a months-long investigation. The derivatives market regulator maintains that Kalshi is a CFTC-registered contract market, and is therefore above state law.
In September, Attorney General's Office investigator Scott Eggerman used a Utah-based IP address to create a Kalshi account and place a series of wagers on sporting events. He found he was able to do so despite the Aug. 4 federal court ruling against the site. Kalshi sought an injunction as they appealed the decision, but it was denied.
Sites like Kalshi pose a gray area for what is and isn't gambling. They offer yes/no event contracts on outcomes for everything from sports to elections to whether rapper Nicki Minaj will be the next White House press secretary. Utah says that's "indistinguishable from the bets offered by a traditional sportsbook."
The Trump administration has ties to prediction markets. Donald Trump Jr. serves as a strategic adviser to Kalshi, and President Donald Trump has also launched a cryptocurrency-based prediction market app through Truth Social called Truth Predict.
Criminal charges have been hinted at in Utah before. In May, Gov. Spencer Cox praised Arizona for pressing charges against Kalshi. When Cox was asked at the time if he was concerned about repercussions from the administration if the state moved against prediction market apps, he said he wasn't.
"We haven't heard anything from the administration," he said in May. "You know, I came out very strongly. It's been several weeks ago now, and there's been no, no pushback at all on that piece."
A federal judge initially blocked Arizona's case, but after a 9th U.S. Circuit Court of Appeals ruling favorable to Nevada, the state is looking to revive it.
In a statement, Kalshi said the Utah Attorney General's case is "a crazy overreach; Utah is clearly playing politics. We look forward to putting a stop to this in court, just like we did in Arizona."
Copyright 2026 KUER 90.1