From Ars Technica · · 2m
Trump admin sues Utah to block gambling ban on Kalshi
The CFTC is fighting Utah's attempt to shut down the prediction market Kalshi, making Utah the tenth state sued by the federal regulator.
In brief
The CFTC is fighting Utah's attempt to shut down the prediction market Kalshi, making Utah the tenth state sued by the federal regulator. The Trump administration's CFTC sued Utah to stop the state enforcing its gambling ban against prediction market Kalshi, escalating a federal-state fight over regulatory authority…
Trump admin sues Utah over Kalshi
The US Commodity Futures Trading Commission filed a lawsuit against Utah to block the state from shutting down Kalshi, a prediction market. Utah is the tenth state sued by the CFTC.
Utah's gambling ban targets Kalshi
Utah sued Kalshi in state court last week, seeking an order prohibiting the prediction market from offering bets on sports, elections, politics and other events.
Utah attorney general's position
Utah Attorney General Derek Brown, a Republican, said Kalshi runs an online casino and violates state law. Utah has prohibited gambling for one hundred thirty years.
“Kalshi runs an online casino in Utah and calls it a prediction market. That violates Utah law.”
Kalshi already lost in federal court
In August, US District Judge Robert Shelby ruled that federal law does not prevent Utah from enforcing its anti-gambling laws against Kalshi.
CFTC claims sole federal authority
The CFTC argues Congress gave it exclusive jurisdiction over prediction markets as commodity derivatives, and state gambling laws cannot obstruct CFTC-registered exchanges.
“Congress entrusted the CFTC to be the federal regulator with sole responsibility to oversee these markets.”
Other states and companies at stake
If Utah shuts down Kalshi, it could affect Polymarket and sports betting sites DraftKings and FanDuel, which are also CFTC-registered and operate in Utah.
Circuit courts divided on the issue
Federal appeals courts have split on whether states can enforce gambling laws against prediction markets. The Third Circuit sided with the CFTC, but the Sixth and Ninth Circuits sided with states.
Supreme Court likely to decide
Because circuit appeals courts disagree, the Supreme Court will likely take up the case. New Jersey and thirty-nine other states plus the District of Columbia filed a brief supporting New Jersey's petition.
The headline
The Trump administration's CFTC sued Utah to stop the state enforcing its gambling ban against prediction market Kalshi, escalating a federal-state fight over regulatory authority.
