Utah Attorney General Derek Brown filed 14 criminal counts on October 28 against prediction market exchange KalshiEX LLC and its two founders. Charged individually are CEO Tarek Mansur and chief operating officer Luana Lopez Lara, while the company itself is named in the case alongside them.
The case centers on bets placed by a state agent. The agent opened a Kalshi account on September 13 using a Utah address and a local debit card, then placed 12 sports bets totaling $114.87 on NFL, college football, MLB, MLS and NHL games.
The charges break down as follows: 12 counts of online promotion of gambling, third-degree felonies; one count of enterprise of unlawful activity, a second-degree felony; and one count of general promotion of gambling, a Class A misdemeanor. A second-degree felony in Utah carries up to 15 years in prison and a $10,000 fine. No arrest warrants were issued for Mansur or Lara; both received summonses to respond to the charges.
This is not the first clash between the state and Kalshi. On October 20, Brown filed a civil lawsuit alleging that Kalshi violates Utah’s gambling laws by letting residents bet on sports, elections and politics. A few days later, the federal regulator CFTC sued the state, arguing that Utah has no jurisdiction over a federally regulated prediction market.
The sides are far apart. Kalshi called the charges “crazy overreach,” adding: “Utah is clearly playing politics.” Brown responded that federal registration does not put the company above the law.
The core legal question matters for the whole market. The CFTC argues that most prediction market contracts are swaps and fall under its exclusive jurisdiction. States say such companies operate illegally by violating gambling laws. Courts are divided on the issue: federal appeals courts disagree on whether sports contracts are swaps.
The immediate impact is already visible among sportsbooks. According to the attorney general’s post on X, DraftKings, FanDuel and Fanatics are pulling sports predictions out of Utah.
