Utah Files 14 Criminal Charges Against Kalshi

Jonathan Rodriguez

Written by: Jonathan Rodriguez

Published: Fri Oct 30, 2026, 7:00 am ET

Read Time: 4 minutes

Utah Files 14 Criminal Charges Against Kalshi

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Utah has filed 14 criminal charges against prediction-market operator Kalshi and its two co-founders over alleged illegal gambling activities. The charges mark a significant escalation in the state's efforts to restrict the company's operations.

They also follow a recent civil lawsuit filed by Utah Attorney General Derek Brown, who accused Kalshi of running an illegal gambling business.

Brown filed the criminal charges against Kalshi, CEO Tarek Mansour and COO Luana Lopes Lara on October 28. The prosecution alleges that the company promoted online gambling by allowing Utah residents to wager on sporting events through its platform.

"Gambling is illegal in Utah, whether you place the bet, run the game, or promote it," Brown said in a statement. 

"Calling it a 'prediction market' doesn't change what it is, and being federally registered doesn't put a company above the law."

Utah's Criminal Charges Follow Undercover Investigation

The criminal case includes 13 felony counts and one misdemeanor charge. Specifically, prosecutors filed one second-degree felony count for a pattern of unlawful activity. They also filed 12 third-degree felony counts of online gambling promotion.

Additionally, Kalshi faces one Class A misdemeanor count of general gambling promotion. The charges stem from an undercover investigation conducted by the Utah Attorney General's Office.

According to the charging documents, investigator Scott Eggerman opened an undercover Kalshi account on September 13, 2026. He used a Utah residential address, local phone number and Utah-issued debit card. 

The investigator subsequently placed 12 wagers on sporting events over approximately two weeks.

The transactions covered several leagues and competitions, including the NFL, MLB, NHL, MLS and NCAA football. Across those wagers, Eggerman risked $114.87 and lost $25.10. Prosecutors also allege that Kalshi collected transaction fees from the wagers.

The investigation aimed to establish whether Kalshi knowingly facilitated sports gambling for Utah residents. Prosecutors argue that the company continued accepting wagers despite an earlier federal court ruling.

Derek Brown Previously Sued Kalshi Over Utah Gambling

The criminal prosecution follows another legal action Brown initiated against Kalshi on October 20. The attorney general filed a civil lawsuit accusing the prediction-market operator of violating Utah gambling laws.

Unlike the criminal charges, the earlier lawsuit challenges a broader range of event contracts. These include markets tied to sports, elections, politics and other outcomes. Utah argues that labeling these products as event contracts does not exempt them from state gambling restrictions.

The state is seeking to stop Kalshi from operating in Utah and recover profits allegedly generated through illegal gambling. Its complaint estimates that Kalshi collected between $30.6 million and $61.2 million in fees from Utah accounts.

Consequently, the latest criminal charges add another layer to Utah's ongoing legal campaign. The two proceedings also highlight the state's opposition to prediction markets operating without authorization under Utah gambling laws.

CFTC Challenges Utah's Enforcement Efforts

The dispute also involves the Commodity Futures Trading Commission (CFTC), which supports Kalshi's position on federal oversight. On October 27, the federal agency filed a lawsuit against Utah seeking to block the state's enforcement efforts.

The CFTC argues that Congress granted it exclusive authority over commodity derivatives markets. It considers Kalshi's event contracts federally regulated financial products rather than traditional sports wagers.

However, Utah maintains that federal registration does not exempt Kalshi from state gambling restrictions. This disagreement has created a broader jurisdictional dispute involving prediction markets and state regulators.

The outcome could have implications for other operators competing with traditional US online sportsbooks. Several states have challenged prediction-market platforms over sports contracts, arguing that these products resemble unlicensed sports betting.

Kalshi Rejects Utah's Criminal Allegations

Kalshi has rejected the charges and criticized Utah's decision to pursue criminal prosecution. A company spokesperson described the state's actions as political overreach.

"This is a crazy overreach; Utah is clearly playing politics," a Kalshi spokesperson said. "We look forward to putting a stop to this in court, just like we did in Arizona."

The company maintains that federal regulators oversee its event contracts. Meanwhile, Utah points to an earlier federal court decision supporting its ability to enforce state gambling laws against Kalshi.

In August 2026, a federal judge rejected Kalshi's request for a preliminary injunction against Utah's enforcement efforts. The Tenth Circuit subsequently declined to grant the company emergency relief in September.

Kalshi now faces separate civil and criminal proceedings in Utah, while the CFTC challenges the state's authority in federal court. These cases could help determine how states regulate prediction markets alongside established gambling operators.

Jonathan Rodriguez
Jonathan Rodriguez

Jonathan is an avid basketball fan, and is often looking forward to the next upcoming NBA season when not checking players' stats during games. He also likes to keep his ears on the ground for the latest rumblings in the online casino industry.

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