The Commodity Futures Trading Commission, joined by the Justice Department, sued the State of Utah and Attorney General Derek Brown on October 26, 2026, asking a federal court to stop Utah from enforcing its gambling laws against Kalshi’s prediction markets.
The CFTC announced the suit in a press release the same day. Filed in the U.S. District Court for the District of Utah, the case asks for preliminary and permanent injunctions blocking Utah from enforcing its anti-gambling statutes against prediction markets the CFTC regulates. Kalshi runs as a designated contract market, an exchange registered and supervised by the CFTC, so the federal government is defending its own regulatory turf: Kalshi is not a party to this suit.
“Event contracts do not just serve hedging and investment purposes: they also provide the public with information about the outcome of future events,” CFTC Chairman Mike Selig said in a statement.
The suit came six days after Brown’s own office sued multiple Kalshi entities on October 20, seeking to halt the company’s operations in Utah and to recover fees it puts at $30.6 million to $61.2 million. That range is the state’s claim in its complaint, not an adjudicated award. Utah’s attorney general sued Kalshi to end sports and election betting in the state, arguing no Utah law authorizes it.
“Anyone offering gambling to Utahns is on notice that it is illegal in Utah and that no Utah law authorizes it,” Brown said when he filed the state case.
Federal regulators have moved against state enforcement of prediction markets before, and the Utah filing escalates that fight from scattered rulings into a direct federal-versus-state case.
Utah is a hard case for the CFTC. The state has banned gambling in its constitution since statehood in 1896, with no lottery or casino carve-outs. In August 2026 a federal judge ruled that the Commodity Exchange Act, the CFTC’s founding statute, does not override Utah’s anti-gambling laws as applied to Kalshi’s sports-related contracts. That ruling is under appeal. Utah is the tenth state where federal regulators have intervened to assert jurisdiction over registered exchanges in prediction market disputes, and the outcome here will help decide whether CFTC-regulated markets can operate nationwide regardless of state gambling law.
