Kalshi charged in Utah for promoting illegal gambling

The company was also alleged to have allowed an undercover agent to bet on football, baseball, and other sporting events. Charges include one count of pattern of unlawful activity, 12 counts of online gambling promotion, and one count of general gambling promotion. These add up to 1 second-degree felony, 1 third-degree felony, and a misdemeanor.

In a statement, Utah AG Derek Brown said that “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.”

“This is crazy overreach,” said a Kalshi spokesperson, per Reuters. “Utah is clearly playing politics. We look forward to putting a stop to this in court, just like we did in Arizona.” When Arizona attempted to bring a case, they were blocked from doing so by the federal government.

Kalshi co-founders Tarek Mansour and Luana Lopes Lara were charged in Salt Lake County after the federal US Commodity Futures Trading Commission sued Utah in an effort to block that state’s anti-gambling enforcement against Kalshi. This body claims that they alone have jurisdiction over prediction markets.

Kalshi allows users of the platform to bet on nearly anything, from political races to sporting events, and had been under fire from Utah, which prevents gambling in the state. In Washington state, however, Kalshi was made to cease many of its operations after it was found “Kalshi likely violated the Washington Gambling Act and the Consumer Protection Act by running an illegal gambling operation in Washington,” said the state’s AG in a release.

“The order requires Kalshi to stop offering, accepting, or facilitating wagers on sports, elections, politics, entertainment, culture, tech and science, or mentions in Washington. Kalshi must implement an IP address and residency based geofence by August 19 and a multi-source geofencing solution by September 2. This does not include all the wagers offered on Kalshi, but it includes a substantial part of their business, which in recent years has been increasingly driven by sports wagers.”

The Supreme Court has been asked to weigh in.