Utah has filed 14 criminal charges against prediction market operator Kalshi and its co-founders, Tarek Mansour and Luana Lopes Lara, escalating the state’s effort to apply its gambling laws to sports event contracts offered through the federally regulated exchange.
The case follows an undercover investigation in which an agent from the Utah Attorney General’s Office opened a Kalshi account using a Utah residential address, local phone number and locally issued debit card.
According to the charging documents cited by The Salt Lake Tribune, Kalshi required the agent to “confirm his location using location services” before allowing him to trade. The agent then used the platform from Salt Lake and Davis counties.
Over roughly two weeks, the investigator placed 12 sports “wagers” and risked a total of $114.87. He won six and lost six, finishing with a net loss of $25.10.
The transactions covered professional and college football, Major League Baseball, Major League Soccer and an NHL game involving the Utah Mammoth.
Undercover Trades Form Basis of Criminal Case
The state alleges that the 12 transactions demonstrate that Kalshi continued making sports contracts available to Utah residents despite the state’s prohibition on gambling.
The charges include felony counts connected with online gambling promotion, a felony allegation involving a pattern of unlawful activity and a misdemeanor gambling charge. The supplied reports describe the exact breakdown somewhat differently, although all state that 14 charges were filed.
The Salt Lake Tribune reported that each of the 12 undercover bets resulted in an Online Gambling Promotion charge, alongside a second-degree felony charge of Pattern of Unlawful Activity and a class A misdemeanor General Gambling Promotion charge.
The agent’s wagers included predictions on the New York Giants against the Dallas Cowboys, the Utah Utes’ margin against Utah State and several markets tied to an Eagles-Titans game.
Other contracts covered player statistics involving Atlanta Falcons quarterback Michael Penix Jr. and running back Bijan Robinson. The final listed wager backed the Utah Mammoth to defeat the Colorado Avalanche on September 26.
Mansour and Lopes Lara have not been issued arrest warrants. They received summonses requiring them to respond to the charges in Third District Court in Salt Lake County.
Utah Attorney General Derek Brown said Kalshi continued operating in the state despite an earlier federal ruling allowing Utah gambling law to be enforced against 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 in a statement.
Kalshi Rejects Utah’s Characterization
Kalshi has consistently argued that its event contracts are federally regulated financial instruments under the Commodity Exchange Act rather than gambling products subject to individual state laws.
The company described the criminal case as a “crazy overreach” and said that “Utah is clearly playing politics”.
“We look forward to putting a stop to this in court, just like we did in Arizona,” it said.
The charges follow a separate civil lawsuit brought by Utah against Kalshi days earlier. That case seeks to stop the company from offering disputed event contracts to residents and recover money the state alleges was generated through unlawful activity.
Utah officials have previously described Kalshi as “the manager of a back-alley gambling den.”
Picayune-style enforcement is not the only pressure facing prediction markets. Other states, including Arizona, Connecticut, Massachusetts, Michigan and Nevada, have pursued court action or restrictions involving Kalshi and similar platforms.
The growing number of cases reflects a wider disagreement over which level of government has authority over sports event contracts.
CFTC Challenges Utah’s State Enforcement
The Commodity Futures Trading Commission has entered the dispute on Kalshi’s side of the jurisdictional question.
The CFTC filed suit against Utah this week, arguing that federal commodities law gives the agency authority over prediction markets and supersedes conflicting state gambling regulation.
Utah has taken the opposite view, maintaining that sports-related contracts offered to residents fall within its gambling restrictions.
That disagreement is already playing out through parallel federal and state proceedings. Earlier litigation allowed Utah to continue applying its gambling laws to Kalshi while the operator pursued further challenges.
The latest criminal case adds another layer to that conflict by targeting both the company and its two co-founders personally.
Utah prosecutors have not yet specified what criminal penalties they will seek if the defendants are convicted, although the felony counts can carry imprisonment.
For now, Kalshi faces both civil and criminal proceedings in Utah while continuing to argue that its federal registration places its contracts under exclusive CFTC oversight.