KEY TAKEAWAYS
The United States and the Commodity Futures Trading Commission sued the State of Utah and its attorney general, Derek Brown, in federal court on October 26, 2026, asking a judge to block the state from enforcing its gambling laws against prediction markets regulated by the CFTC. The complaint answers a civil case that Utah filed against Kalshi and two Susquehanna entities on October 20. Two days after the federal complaint was filed, Utah’s attorney general filed criminal charges against KalshiEX, LLC, and the AP reports that two Kalshi executives were charged as well. Taken together, the filings sharpen a dispute over whether states or federal regulators decide the legality of event contracts.
Three Filings in Eight Days
The sequence began on October 20, when Utah’s attorney general announced a civil lawsuit in state court against KalshiEX LLC and related entities. The state alleges that Kalshi lets Utah residents bet on sports, elections and politics, in violation of state gambling law, and that the activity is a public nuisance, according to the attorney general’s announcement.
The federal government responded within a week. The United States and the CFTC filed their complaint in the U.S. District Court for the District of Utah on October 26, and the CFTC announced the lawsuit the next day. The complaint names Utah and Brown, in his official capacity, as defendants, and it is captioned as case number 2:26-cv-01055.
Utah then escalated. On October 28, the attorney general’s office filed a criminal charging document in Salt Lake County’s Third District Court against KalshiEX, LLC. The AP reported that Utah also charged two Kalshi executives, and it linked the move to a federal judge’s earlier refusal to stop Utah from enforcing its anti-gambling laws against Kalshi.
The Timeline at a Glance
The table below lists the dated events described in official filings and announcements. Each entry reflects what the named source states, and the descriptions of Utah’s and the federal government’s positions are their own allegations or arguments.
| Date | Event |
|---|---|
| February 2026 | Kalshi sues Utah officials in federal court, arguing the Commodity Exchange Act bars state regulation of its platform |
| August 2026 | U.S. District Judge Robert Shelby grants summary judgment to Utah, holding that federal law does not override Utah’s gambling laws |
| September 8, 2026 | The Tenth Circuit denies Kalshi’s request to block enforcement while its appeal proceeds |
| October 20, 2026 | Utah files a civil lawsuit against Kalshi entities and Susquehanna entities in state court |
| October 26, 2026 | The United States and the CFTC file suit against Utah and its attorney general |
| October 27, 2026 | The CFTC announces the lawsuit |
| October 28, 2026 | Utah files criminal charges against KalshiEX, LLC |
The first three rows come from the Utah attorney general’s description of the earlier case. The Tenth Circuit appeal remains pending, according to the attorney general’s October 20 announcement, so the dispute is now running in at least three courts at once.
What the Federal Complaint Asks For
The federal complaint rests on the Supremacy Clause. It says the Commodity Exchange Act gives the CFTC “exclusive jurisdiction” over swaps traded on federally regulated exchanges, known as designated contract markets, and that the event contracts Utah is targeting are such swaps. Utah’s gambling statutes and public nuisance law are preempted as applied to those markets, the plaintiffs argue.
The plaintiffs ask the court to declare that Utah’s laws violate the Supremacy Clause as applied to transactions on CFTC-regulated markets. They also seek preliminary and permanent injunctions that would stop Utah and its officials from investigating CFTC-regulated entities and their affiliates and partners, or enforcing Utah law against transactions on those markets.
The complaint describes the injury in sovereign terms. It says Utah is attempting to block exchanges the Commission has approved and event contracts that have been self-certified and allowed to list, and that this harms the federal government’s interest in enforcing federal law. Kalshi is not a named plaintiff, according to the complaint’s caption, which lists only the United States and the CFTC.
CFTC Chairman Michael S. Selig said in the agency’s announcement that “Utah seeks to shut down prediction markets across a wide variety of markets.” He added that Congress made the CFTC the federal regulator with sole responsibility for overseeing them. The agency said it has also started legal proceedings against nine other states and filed briefs in four federal courts of appeal and one state supreme court, which by that count makes Utah the tenth state the CFTC has taken to court.
Utah’s Civil Case and the Earlier Ruling
Utah’s own civil complaint names five Kalshi entities and two Susquehanna firms, Susquehanna International Group LLP and Susquehanna Government Products LLLP, according to the federal complaint’s summary of it. The state contends that Kalshi’s offerings are indistinguishable from a traditional sportsbook and says Kalshi began offering them to Utah residents by at least September 2024.
The relief Utah seeks is broad. According to the federal complaint’s description, the state wants to halt the conduct, recover profits it considers illegally obtained, and compensate the state and its citizens for harms. The state also asks the court to bar Kalshi from offering in Utah the categories of event contracts covered by its gambling prohibitions.
The October 20 case followed a federal court ruling in Utah’s favor. Kalshi sued Utah officials, including the governor and attorney general, in February 2026 and argued that federal law prevented the state from regulating its platform. In August, Judge Shelby granted summary judgment to Utah, holding that the Commodity Exchange Act does not override the state’s gambling laws, and the Tenth Circuit declined on September 8 to block enforcement while Kalshi appeals.
That history is background for the new federal complaint, whose plaintiffs are the federal government rather than Kalshi, so the parties and the requested relief differ from the earlier case.
The Criminal Charges
The October 28 charging document against KalshiEX, LLC lists 14 counts. Count 1 alleges a pattern of unlawful activity, a second-degree felony, covering September 13 through September 26, 2026. Counts 2 through 13 allege online gambling promotion, each a third-degree felony, and Count 14 alleges general gambling promotion, a class A misdemeanor.
The charges rest on wagers placed by a state agent in Salt Lake County and Davis County. The document describes bets on NFL, college and NHL games during September 2026, and it alleges that Kalshi charged and collected a fee on the wagers. The document names Kalshi’s co-founders as persons connected to the alleged pattern, and the AP reported that Kalshi and two of its executives face charges.
Criminal charges are accusations, not findings. The sources reviewed for this article did not include a statement from Kalshi responding to the criminal case, so none is reported here. Nothing in the filings amounts to a conviction, and the company has not been found liable in any of the proceedings described above.
Why the Fight Matters to the Industry
At stake is who sets the rules for event contracts on sports. Utah treats them as gambling subject to state law, and the federal government treats them as derivatives subject to federal oversight. The answer could shape whether a single federally regulated exchange can offer the same products in every state or must work around state prohibitions.
The dispute reaches beyond one exchange. The federal complaint seeks to protect CFTC-regulated entities “and their affiliates and partners,” wording that extends beyond the exchanges themselves. Prediction-market platforms have continued to launch, and this site has covered launches such as High Roller’s ROLR prediction markets in the United States and Hacksaw’s business-to-business prediction markets platform.
The attorney general’s announcement notes that the state’s constitution bars the legislature from authorizing gambling and that state law makes it illegal. The state presents the dispute as one about enforcing its own gambling law.
What Is and Isn’t Decided
Very little is settled. No court has ruled on the federal complaint in the sources reviewed, and the plaintiffs’ request for a preliminary injunction remains a request. The Utah civil case and the criminal case are also at their start.
One earlier question has been answered at the trial-court level. Judge Shelby’s August summary judgment holds that federal law does not override Utah’s gambling laws in Kalshi’s case, but Kalshi’s appeal is still pending, so that holding is not final. The Tenth Circuit’s September 8 order concerned only a request to block enforcement during the appeal.
The positions in the filings are advocacy. The CFTC describes the event contracts as swaps on regulated markets, while Utah describes the same activity as illegal gambling. Neither description is a court finding, and this article presents both as the parties’ claims.
What to Watch Next
The next visible steps are procedural. The federal court will decide whether to grant the plaintiffs’ request for preliminary relief, and Utah must respond to the complaint. Kalshi’s appeal at the Tenth Circuit also continues, along with the state-court civil and criminal cases.
The CFTC’s other actions matter as well. It has proceedings against nine other states and has filed briefs in several appellate courts, so the Utah case is one of several in which the agency is defending its position. The sources reviewed give no hearing dates for the Utah cases, and none are reported here.
Readers can follow the primary documents on the CFTC’s press page and the Utah attorney general’s website, which hosts the charging document. Court dockets will show any scheduling orders in the federal case.
Frequently Asked Questions
Sources
- CFTC — CFTC Sues to Block State Enforcement in Utah Amid Ongoing Efforts to Preserve Jurisdiction (October 27, 2026)
- CFTC — Complaint for Declaratory and Injunctive Relief, United States v. State of Utah (filed October 26, 2026)
- Utah Attorney General — Utah sues Kalshi, alleging its prediction market is gambling (October 20, 2026)
- Utah Attorney General — Criminal charging document, State of Utah v. KalshiEX, LLC (October 2026)
- The Associated Press (via The Washington Post) — Utah charges Kalshi and its founders, escalating a fight over who can regulate prediction markets (October 28, 2026)
- SBC Americas — CFTC Sues Utah Over State’s Kalshi Gambling Enforcement (October 27, 2026)
