Utah Attorney General Derek Brown filed a civil lawsuit Tuesday against five Kalshi entities and two Susquehanna trading firms, accusing them of running an illegal gambling operation in the state. The complaint names KalshiEx, Kalshi Trading and related Kalshi companies alongside Susquehanna International Group and Susquehanna Government Products.
The state alleges that calling wagers 'event contracts' does not change the nature of the product. The filing compares KalshiEx to 'the manager of a back-alley gambling den,' saying it hosts bets and collects a fee on each transaction. Utah is also targeting liquidity providers, alleging that Kalshi Trading and the Susquehanna firms acted as counterparties to retail users' bets and profited when those users lost.
Utah estimates Kalshi collected between $30.6 million and $61.2 million in fees from Utah-based accounts through Oct. 19, while cautioning that the actual figure could be higher or lower. The state seeks restitution, compensatory and punitive damages, and a court order blocking sports, election, politics, culture and 'mentions' contracts. It also wants stronger geolocation controls to enforce restrictions.
Sports and gaming attorney Daniel Wallach called the case 'the first state attorney general enforcement action targeting prediction-market market makers.' At a press conference, Brown warned users, especially younger men: 'These companies are engineered to do one thing and one thing alone, and that's empty your wallet.'
The action follows August lawsuits from Connecticut and Baltimore over alleged unlicensed sports betting; Baltimore also named distribution partners Coinbase, Robinhood and Webull. In September, a federal appeals court ruled Ohio and Tennessee could enforce their sports betting laws against Kalshi, rejecting the argument that federal derivatives oversight preempted state law. Brown said the Utah case is part of a larger investigation and could expand to other platforms.
