Utah has filed 14 criminal charges against prediction-market platform KalshiEX LLC and its two co-founders, Tarek Mansour and Luana Lopes Lara, accusing the company of illegally promoting online gambling in the state. It is the second state to bring a criminal case against Kalshi, after Arizona did so in March — a case later blocked by a federal judge.
Kalshi (Credits: CoinDesk)
Utah Kalshi Criminal Charges: 14 Counts Including a Felony
The charging information, filed October 28 in Salt Lake County’s Third Judicial District Court, lists one second-degree felony count of engaging in a pattern of unlawful activity, 12 third-degree felony counts of online gambling promotion, and one Class A misdemeanor count of gambling promotion. Under Utah law, a second-degree felony carries a possible one-to-15-year prison term.
Attorney General Derek Brown said: “Gambling is illegal in Utah, whether you place the bet, run the game, or promote it. Calling it a ‘prediction market’ doesn’t change what it is, and being federally registered doesn’t put a company above the law.” Utah bans every form of gambling and is one of only two states with the prohibition written into its constitution.
How the Undercover Sting Built the Case
The case rests on an undercover investigation: state agent Scott Eggerman opened a Kalshi account on September 13 with an undercover name and debit card, identifying himself as a Utah resident. Over 11 days he placed 12 sports wagers — NFL and MLB games, a Real Salt Lake soccer fixture and the Utes’ clash with Utah State — even after confirming his Utah location. Prosecutors say Kalshi collected fees of between 3 and 78 cents per trade.
A Kalshi spokesperson called the charges “a crazy overreach,” adding: “Utah is clearly playing politics. We look forward to putting a stop to this in court, just like we did in Arizona.” The criminal case lands one day after the CFTC sued to block Utah from enforcing its gambling laws against federally regulated exchanges — deepening the fight over whether prediction markets answer to state gambling law or federal derivatives regulation.
Also Read: CFTC Sues Utah to Shield Kalshi Prediction Markets, Claiming Federal Authority Over State Gambling Ban
Also Read: CFTC Chief Asks Who Is Liable When an AI Trading Agent ‘Goes Rogue’
Source: CoinDesk — read the full story there.
