Utah and Louisiana Sue Kalshi Over Illegal Gambling
Utah and Louisiana officials filed criminal charges and lawsuits against Kalshi and other prediction markets for allegedly operating unlicensed sports and event gambling operations.
Attorneys general from Utah and Louisiana have launched aggressive legal actions against Kalshi and other prediction market platforms, alleging they operate illegal gambling operations. In Utah, Attorney General Derek Brown filed 13 felony charges against Kalshi and its founders, asserting the platform acts as a house by taking positions opposite to its bettors. Kalshi maintains its event contracts are federally regulated swaps exempt from state gaming laws.
In Louisiana, Attorney General Liz Murrill filed a lawsuit against Kalshi, Polymarket, Robinhood, Coinbase, and Gemini for offering unlicensed contracts tied to sports, elections, and awards. A judge in Tangipahoa Parish subsequently granted a temporary restraining order to halt these activities within the state. Murrill stated that attempts by operators to use new terminology to evade laws are "not fooling anyone."
The conflict centers on whether these markets fall under the jurisdiction of the Commodity Futures Trading Commission or state and tribal gaming laws. The American Gaming Association estimates that prediction market betting has siphoned over $1.6 billion in potential state gaming taxes. In response to the legal pressure, Kalshi filed a preemptive federal lawsuit against Louisiana Governor Jeff Landry and Murrill to block the enforcement of state gambling laws.
