Utah files criminal charges against Kalshi and its founders, days after the CFTC sued the state

The fight over prediction markets just moved from civil court to criminal court. Utah Attorney General Derek Brown filed criminal charges against KalshiEX, LLC and its two co-founders, CEO Tarek Mansour and COO Luana Lopes Lara, on Oct. 28, 2026, according to Reuters and KSL.

"Gambling is illegal in Utah, whether you place the bet, run the game, or promote it," Brown said in a statement quoted by Reuters. "Calling it a 'prediction market' doesn't change what it is, and being federally registered doesn't put a company above the law."

What the charges say

The case, filed in state court in Salt Lake County, includes one count of pattern of unlawful activity (a second-degree felony), 12 counts of online gambling promotion (third-degree felonies) and one misdemeanor count of general gambling promotion, Reuters reported.

According to KSL, an investigator, Agent Scott Eggerman, opened an undercover account starting on Sept. 13, 2026. The charges allege Kalshi let him place wagers on 12 different games, including football and hockey games, despite his repeatedly confirming his location in Utah.

Reuters reported that the charging papers say Kalshi kept accepting bets from Utah residents even after a federal judge ruled in August that federal law did not prevent Utah from enforcing its gaming laws against the company. Only Arizona had previously pursued a criminal case against Kalshi, and that case was later blocked by a federal judge, per Reuters.

Washington is on Kalshi's side

The charges landed days after the Commodity Futures Trading Commission and the federal government sued Utah. Their complaint argues that the event contracts are "swaps" under the Commodity Exchange Act and that "Commodity Exchange Act-regulated transactions are not gambling," KSL reported. The federal government has brought similar actions against nine other states, including Arizona, New York and Illinois, according to the complaint as described by KSL.

"This is a crazy overreach; Utah is clearly playing politics," a Kalshi spokesperson told Reuters. "We look forward to putting a stop to this in court, just like we did in Arizona." Reuters noted the jurisdiction question has divided appeals courts and is likely to be decided by the U.S. Supreme Court.