Utah Attorney General Derek Brown sued Kalshi in state court on 20th October 2026. The complaint seeks $30 million to $60 million in profits the state says the prediction market made from Utahns.
The Brief
- Utah’s Attorney General’s Office named five Kalshi entities and two Susquehanna International Group affiliates as defendants in the state-court case.
- Kalshi’s own data shows nearly 56,000 accounts with Utah addresses as of February, behind more than 5 million wagers.
- The complaint asks a judge to halt Kalshi wagers in Utah and require geolocation tools that block residents from the app.
- Derek Brown declined to comment on any existing or potential criminal investigation into the company.
Utah wants the fees and the losses back
The complaint accuses the defendants of breaking Utah’s online gambling and sports betting laws since at least 2024. It describes Kalshi as “the manager of a back-alley gambling den” and argues the company knew the state constitution bans gambling.
THE BLOCK: Utah AG Derek Brown is suing Kalshi and two Susquehanna trading firms over alleged illegal online gambling, seeking to block bets in the state and recover profits. Brown said Kalshi kept accepting bets after losing a federal court fight over Utah’s gambling laws, with more than 32,000 Utahns holding verified accounts.
— The Block (@TheBlockCo) October 20, 2026
The complaint names five Kalshi entities: Kalshi Inc., KalshiEX LLC, Kalshi Klear Inc., Kalshi Klear LLC and Kalshi Trading LLC. It also names Susquehanna International Group LLP and Susquehanna Government Products LLLP. Pulling in the two Susquehanna affiliates widens the case past the exchange itself.
The state wants four things from the court:
- The profits Kalshi collected in fees on wagers placed by Utahns.
- Repayment of the money residents lost on those wagers.
- An order stopping Kalshi from offering wagers anywhere in Utah.
- Geolocation controls that keep Utah users off the platform.
Brown framed the injunction broadly. He said the state is asking the courts “to stop sports, elections, politics, culture and mention bets here in Utah.” That list reaches well beyond sports, so a win would shut far more than one product line.
The estimate rests on Kalshi’s own data
Utah built its damages figure from records Kalshi produced in its earlier federal lawsuit against the state. Those records showed nearly 56,000 accounts registered to Utah addresses as of February. Those accounts had entered more than 5 million wagers.
The complaint then extrapolates. It assumes the Utah share of Kalshi activity held steady over the platform’s lifetime and projects that share through 19th October 2026. That projection produces the state’s dollar range.
The range is a modeled estimate, built on an assumption the state has not yet tested. Brown said discovery will set the specific amount. He also said he had determined, under Utah law, that the platform causes substantial and ongoing harm to a significant number of residents.
A federal loss cleared the way
Kalshi moved first. It sued Utah officials in February, arguing that its federal registration as an exchange placed its contracts beyond state gambling law. In August, U.S. District Judge Robert Shelby granted Utah summary judgment and ruled the state could enforce its anti-gambling laws against Kalshi.
The new complaint turns that ruling into a bill. Offering online gambling to anyone in Utah is a third-degree felony, according to the attorney general’s office. Brown would not say whether his office is weighing charges.
Utah is also not the only state pressing the point. New York Attorney General Letitia James has sued Kalshi, alleging it runs an unlicensed gambling operation there. Those cases join a wider set of state fights over sports event contracts that have pulled in other brokers.
The Bottom Line
The Utah case shifts the question. The federal ruling settled whether Utah can regulate Kalshi, so the remaining dispute is how much Kalshi may owe. Two points stay unresolved: will the lifetime extrapolation survive discovery, and will Brown’s office pair this civil case with a criminal one?
Brown also argued that Kalshi and similar apps target young men and cause mental health and relationship harm when users become addicted. He urged Utahns caught in that cycle to stop and pointed them to the state’s 1-800-MY-RESET line (1-800-697-3738), which takes calls and texts.
Kalshi now has to answer the complaint in state court, where discovery will fix the final number. Utah will build that number from Kalshi’s own records. The company handed those over while asking a federal judge to keep the state out.
