Utah files 13 felony charges against Kalshi and its co-founders
Utah's attorney general has escalated a civil gambling dispute into criminal charges against the prediction market operator and CEO Tarek Mansour, raising the stakes beyond Arizona's earlier misdemeanour case.
Utah has filed 13 felony charges and one misdemeanour count against prediction market operator Kalshi, naming chief executive Tarek Mansour and chief operating officer Luana Lopes Lara as co-defendants, according to SBC Americas.
The filing, lodged with the Third Judicial District Court in Salt Lake City on Wednesday, was brought by the office of Attorney General Derek Brown. It includes one second-degree felony count of "pattern of unlawful activity," 12 third-degree felony counts of "online gambling promotion," and a class A misdemeanour count of "general gambling promotion."
Brown's office said an undercover investigator opened a Kalshi account using a Utah address and placed 12 sports wagers between 13 and 26 September, totalling roughly $115. The bets covered NFL, college football including Utah State fixtures, MLB and NHL events. Sports betting in any form is explicitly illegal under Utah law, and the state alleges Kalshi accepted the wagers and collected fees while aware the user was based in Utah.
The criminal filing follows the Tenth Circuit's denial last month of Kalshi's request for an injunction pending appeal, after an 4 August federal ruling granted Utah summary judgment and found that the Commodity Exchange Act does not pre-empt the state's gambling statutes. Brown's office argues that Mansour and Lopes Lara continued to offer trading on Kalshi to Utah residents despite that ruling.
The criminal case is the latest escalation in a fast-moving dispute. Brown's office filed a civil lawsuit last week against Kalshi, affiliated entities and two Susquehanna trading firms. On Monday, the US Department of Justice and the Commodity Futures Trading Commission sued Brown in federal court seeking to block Utah from pursuing enforcement against its registrant, and Crypto.com and its OG.com exchange filed separate suits of their own.
Utah is only the second state to pursue criminal charges against Kalshi, after Arizona brought 20 misdemeanour counts in March through Attorney General Kristin Mayes and the Arizona Department of Gaming. Mayes said at the time that Kalshi "may brand itself as a 'prediction market,' but what it's actually doing is running an illegal gambling operation and taking bets on Arizona elections, both of which violate Arizona law," adding that "no company gets to decide for itself which laws to follow."
Kalshi secured an injunction against Arizona's action, and a federal judge permanently barred Mayes from prosecuting the company in May. The CFTC also intervened on Kalshi's behalf, winning preliminary relief against Arizona's enforcement effort, a ruling the state has appealed to the Ninth Circuit. CFTC Chairman Michael Selig said at the time that Arizona's approach to "weaponize state criminal law against companies that comply with federal law sets a dangerous precedent," and that the court's order "sends a clear message that intimidation is not an acceptable tactic to circumvent federal law."
Because Utah's gambling statutes are stricter than Arizona's, its charges carry greater legal exposure, with felony rather than misdemeanour counts now heading to trial. Brown wrote on social media that "gambling is gambling" and that it "is illegal in Utah," while Kalshi described the state's move as "a crazy overreach" in a statement to local outlet ABC4 and said it expects to prevail in court.