SALT LAKE CITY — A federal judge ruled Tuesday that Utah can enforce its anti-gambling laws against Kalshi, rejecting the financial exchange’s claim that federal oversight shields its sports prediction contracts from state regulation.
U.S. District Judge Robert J. Shelby granted summary judgment to the state, rejecting the lawsuit Kalshi filed in February and ordering the case closed. Kalshi had argued that its status as a federally registered exchange prevented Utah from treating its sports betting contracts as illegal gambling.
Shelby ruled that federal commodities law does not override state authority to ban gambling within its borders. In the decision, the court noted that gambling regulation is a traditional state power supported by Congress since the early 1800s. The judge added that Congress did not quietly reverse that longstanding position through commodities legislation written to address the 2008 financial crisis.
“You can’t rebrand illegal gambling as a federal commodity, and today a federal judge agreed with us,” Utah Attorney General Derek Brown said. “Kalshi bet that clever branding would beat Utah law. Kalshi lost and Utah won.”
Brown stated that Utah’s constitution strictly bans gambling to protect families, emphasizing that offering online gambling to anyone within the state remains a third-degree felony under Utah law.
Kalshi allows users to trade financial contracts based on various event outcomes, including game winners, point margins, team losing streaks, player touchdowns, and Super Bowl performers. The court determined that Kalshi’s federal registration does not exempt those sports wagers from state jurisdiction.
Utah’s legal position received significant support across the gaming industry, with 23 federally recognized tribes and multiple gaming associations filing motions backing the state’s authority prior to the final ruling.