SALT LAKE CITY (KUTV) — A federally regulated prediction market exchange has filed a lawsuit against Utah officials, arguing the state cannot treat its contracts as illegal gambling because federal law gives regulators exclusive oversight of the industry.
The lawsuit, filed against Gov. Spencer Cox and other state officials by KalshiEX, LLC. on Feb. 23, seeks to block anticipated enforcement of Utah gambling laws against the company’s event-based trading platform.
Kalshi operates a federally regulated exchange where users trade contracts tied to real-world outcomes, commonly known as prediction markets. Topics can include anything from who President Donald Trump will nominate as Chair of the Federal Reserve and how many jobless claims will be made in the week to which sports team will win a game.
In its complaint, Kalshi argues Congress gave the Commodity Futures Trading Commission, not individual states, “exclusive jurisdiction” over trading on CFTC-regulated exchanges.
Kalshi said allowing Utah to enforce state gambling laws would undermine that federal framework and create conflicting rules across the country.
The lawsuit contends state officials’ threatened enforcement “would interfere with the CFTC’s exclusive authority” and could shut down federally authorized trading in the state.
Utah officials, however, have taken the position that prediction markets function as gambling and violate state law. Cox said on social media the markets are “gambling, pure and simple” and “have no place in Utah.”
CFTC leadership warned that efforts to challenge the agency’s authority could end up in court.
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