Utah levels felony charges against Kalshi and company founders

• Utah continues to be a frontier state in the ongoing conflict between states and prediction market platforms
• The state’s AG has resorted to felony charges, going after both of Kalshi’s co-founders, who are also current executives
• Kalshi has riposted that Utah is simply playing politics and that it is looking forward to defeating this legal challenge as it did in Arizona

What Kalshi has been fearing is finally happening, with Utah going after the prediction market platform and its founders in the state’s latest enforcement action, which is stipulating that the issue is serious enough to mandate felony charges.

Kalshi targeted by Utah’s AG in anticipated move by the state

This is a change in tack from previous enforcement actions across the United States, with most gambling regulators and attorneys general focusing on the civil and regulatory side of the issue.

Utah is now pressing on with felony charges, a much higher-stakes litigation that could have serious consequences for the defendants, in this case Kalshi and its founders, and which puts considerable pressure on the vertical, which the state argues is subject to its gambling laws and operating in clear violation of those.

Kalshi’s complaint includes 13 counts of violating the state’s prohibition on gambling as well as a separate charge for profiting from illegal activity. Besides the company, Kalshi’s co-founders, chief executive officer Tarek Mansour and chief operating officer Luana Lopes Lara, are also named in the complaint.

Utah Attorney General Derek Brown has not minced his words, outright calling Kalshi’s operations in the state illegal, and citing the state’s gambling laws, which he insisted applied to the company and its founders.

"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 explained.

Kalshi, however, is not intimidated by the felony charges, arguing that it intends to put a stop to prosecution as it did in Arizona. The company accused the state of playing politics.

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