Utah Files Criminal Charges Against Kalshi and Two Co-Founders
Utah's attorney general filed criminal gambling-promotion charges against prediction market Kalshi and its CEO and COO, escalating a state-federal fight.
What you need to know
Utah Attorney General Derek Brown filed criminal charges Wednesday against prediction market Kalshi and co-founders Tarek Mansour and Luana Lopes Lara, accusing them of illegally promoting online gambling. Kalshi called the charges overreach and said it would fight them in court. The action follows an August federal ruling allowing Utah to enforce its anti-gambling laws.
- Utah filed criminal charges Wednesday against Kalshi and co-founders Tarek Mansour and Luana Lopes Lara
- A criminal complaint alleges Kalshi facilitated an undercover officer's wagers on sports events, including NFL games
- Kalshi called the charges a crazy overreach and said Utah is playing politics
- The charges follow an August federal judge's ruling that Utah could enforce its anti-gambling laws
- The CFTC sued Tuesday to block Utah's enforcement actions, arguing federal jurisdiction over prediction markets
What the Charges Allege
Utah Attorney General Derek Brown filed the charges in a Salt Lake City court on Wednesday against Kalshi, chief executive officer Tarek Mansour and chief operating officer Luana Lopes Lara, according to Al Jazeera.
The criminal complaint accuses the defendants of 12 counts of online gambling promotion, one count of general gambling promotion and one count of pattern of unlawful activity. It alleges Kalshi facilitated an undercover law enforcement officer's wagers on sports events, including NFL games.
The Guardian reported 13 counts of violating the state's gambling prohibition plus a charge involving profiting from illegal activity. Because the outlets' counts differ and the sources do not resolve the discrepancy, the specific count totals are disputed. Brown's office did not immediately say what criminal penalties it would seek; the felony charges carry the possibility of jail time.
Background and Jurisdiction Fight
A federal judge in August ruled that Utah was entitled to enforce its anti-gambling laws against online prediction markets after Kalshi sought to block enforcement. Utah's constitution explicitly bars lawmakers from legalizing gambling.
Kalshi has maintained that prediction markets fall exclusively under federal jurisdiction and are not governed by state gambling laws. In a statement, it called the charges a crazy overreach and said Utah is clearly playing politics, adding that it would fight the case in court as it did in Arizona.
The charges escalate a dispute between states and the federal government. On Tuesday the Commodity Futures Trading Commission sued to block Utah's enforcement actions, arguing federal jurisdiction. Utah filed a civil lawsuit against Kalshi last week. Roughly 20 states are involved in litigation, and New Jersey asked the US Supreme Court last month to decide jurisdiction.
What does Utah accuse Kalshi of doing?
Utah accuses Kalshi of illegally promoting online gambling in a state where gambling is constitutionally banned, alleging in a criminal complaint that the platform facilitated an undercover officer's sports wagers.
Sources & context
- Kalshi, cofounders hit with criminal charges in US state of Utah ↗Al Jazeera
- Utah files criminal charges against prediction market Kalshi and company co-founders ↗The Guardian
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