CFTC Asks Court to Throw Out Kalshi Criminal Case in Utah

The Commodity Futures Trading Commission is looking to shield Kalshi from criminal charges in the Beehive State.

The regulator has asked a federal court to dismiss criminal charges the state filed against Kalshi co-founders Tarek Mansour and Luana Lopes Lara for promoting illegal gambling. The CFTC argues that the operators' sports prediction markets don’t qualify as gambling, making the charges unwarranted. 

“Utah seeks to shut down prediction markets across a wide variety of markets,” CFTC Chairman Michael S. Selig shared in a press release. “Event contracts do not just serve hedging and investment purposes—they also provide the public with information about the outcome of future events. Congress entrusted the CFTC to be the federal regulator with sole responsibility to oversee these markets. As I’ve said before, the CFTC has the expertise and responsibility to defend its exclusive jurisdiction over commodity derivatives, and that’s exactly what we’ll do.” 

Utah’s criminal charges are the latest step in an escalating legal fight with Kalshi. It won a lawsuit against the operator, which is awaiting the Tenth Circuit's decision on an appeal. With that ruling pending, Utah is insisting the lower court's win gives it the right to pursue criminal charges.

Utah has a full ban on both retail and online gambling. 

Three Operators Add Restrictions in Utah

While Kalshi has decided to keep fighting in Utah, three of its rivals are giving up.

DraftKings, Fanatics, and FanDuel have all announced new restrictions for their prediction platforms in the state. This includes removing markets involving sports and other controversial topics. 

While the motivation to avoid criminal charges likely played a role, it wasn’t the only factor.

A bipartisan group of lawmakers representing 37 states has filed a motion supporting Utah’s legal fight. That list includes several states where the three operators offer their online sportsbooks, leading to fears their licenses could be in jeopardy if they stood against the effort. 

Kalshi, which doesn’t operate a traditional sportsbook, has not indicated any plans to follow its three rivals.