Utah filed criminal charges on Wednesday, October 28, against prediction market operator Kalshi and its two co-founders. The move comes months after a federal judge rejected the company's attempt to block Utah from enforcing its strict anti-gambling laws.
What the charges include
- 13 counts of violating Utah's prohibition on gambling
- one additional count involving profiting from illegal activity
- the felony charges carry the possibility of jail time
The charging documents name both the company and its two co-founders. The attorney general's office did not immediately say what penalties it will seek.
Defendant | Role |
|---|---|
Kalshi | prediction market operator |
Tarek Mansour | co-founder and CEO |
Luana Lopes Lara | co-founder and COO |
Utah's argument
Attorney general Derek Brown says Kalshi kept operating in Utah even after a federal court ruled that the state's gambling laws apply to the company.
"Gambling is illegal in Utah, whether you place the bet, run the game, or promote it. Calling it a 'prediction market' doesn't change what it is, and being federally registered doesn't put a company above the law," Brown said.
Kalshi's response
The company called the charges a "crazy overreach" and said "Utah is clearly playing politics". "We look forward to putting a stop to this in court, just like we did in Arizona," Kalshi said.
Kalshi's consistent position is that prediction markets fall exclusively under federal jurisdiction and are not governed by state gambling laws.
Why it matters
Criminal charges could mark a new tactic in how states try to assert regulatory authority over prediction markets. The case targets two executives personally, not just the company.
- litigation between states and operators is open in roughly 20 states
- the spread of lawsuits has created a fragmented legal landscape
- analysts expect the dispute to be settled by the US Supreme Court
- in Utah, a federal judge has already denied Kalshi's request to block enforcement
If you trade on Kalshi from Utah, the platform is now formally accused of operating illegally in the state.