Federal Judge Lets Utah Enforce Gambling Ban Against Kalshi Sports Contracts
A federal judge ruled that Utah may enforce its anti-gambling laws against prediction market operator Kalshi, rejecting the company’s argument that federal commodities regulation shields its sports event contracts from state oversight.
U.S. District Judge Robert J. Shelby granted summary judgment to Utah and concluded that the Commodity Exchange Act does not prevent states from applying their gambling laws. Kalshi had sought to stop Utah officials from treating its sports contracts as illegal wagering.
Kalshi operates as a federally registered contract market overseen by the Commodity Futures Trading Commission. The company argued that the federal framework gives the commission exclusive authority over its products.
Shelby rejected that interpretation. He found that federal commodities law leaves room for state regulation and that Congress did not silently eliminate the states’ traditional authority over gambling when it expanded federal financial regulation.
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The immediate consequence is that Utah may apply its gambling restrictions to Kalshi’s sports markets. Kalshi spokesperson Jacki McGavick said the company disagrees with the ruling and will appeal, maintaining that other courts have recognized exclusive federal jurisdiction over prediction markets.
Utah Attorney General Derek Brown celebrated the decision, arguing that sports event contracts cannot escape gambling rules through different branding. The American Gaming Association also supported the result and described gambling regulation as a state responsibility.
The ruling adds to conflicting legal battles involving prediction markets across the country. The next major step will be Kalshi’s appeal, which could further define the boundary between federal derivatives oversight and state gambling authority.
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