Utah sues Kalshi and Susquehanna firms to halt alleged illegal sports betting

Utah has sued prediction market operator Kalshi and two Susquehanna-affiliated trading firms in state court, alleging they continued to offer illegal sports wagers to Utah residents after a federal judge upheld the state’s right to enforce its gambling ban, The Defiant reported.

Attorney General Derek Brown filed the 63-page complaint on October 20 in Utah’s 3rd District Court in Salt Lake City against Kalshi entities including KalshiEx, Kalshi Klear and Kalshi Trading, as well as Susquehanna International Group and Susquehanna Government Products, according to the Deseret News.

The state is seeking to stop the companies from operating in Utah, enforced through a court-approved geolocation provider, along with damages, restitution and disgorgement of profits. Brown also declared the activity a public nuisance.

State puts Kalshi’s Utah fees at up to $61 million

More than 32,000 Utah residents had verified Kalshi accounts as of February, and the state estimates Kalshi earned $30.5 million to $61.1 million from bets placed by Utah accounts, based on fees of one to two cents per wager. Utah bettors lost at least $5.5 million, according to the complaint.

Brown said the contracts are “engineered to do one thing and one thing alone, and that is to empty your wallet.” The suit argues Kalshi’s event contracts are indistinguishable from sportsbook bets and that the company advertised them as legal in all 50 states.

Federal ruling opened door to state suit

Kalshi sued Utah in federal court in February to block enforcement of the state’s gambling laws. In August, US District Judge Robert Shelby ruled that Utah’s anti-gambling laws apply to Kalshi’s sports contracts and that the federal law Kalshi relied on does not preempt state enforcement. Utah cited that ruling in bringing the case in state court.

Utah’s constitution has prohibited gambling since statehood in 1896. Kalshi did not immediately respond to a request for comment.

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