SALT LAKE CITY — Utah's Attorney General said it was likely that the state would take some enforcement action against Kalshi and other predictive market companies following a ruling in the state's favor.
"At this point of the game, we're simply looking at what our options are and I would say that everything's on the table," Utah Attorney General Derek Brown said in an interview Wednesday with FOX 13 News.
A federal judge on Tuesday sided with the state in a lawsuit filed by Kalshi. In its litigation, the company said it had learned that state officials were planning to take some kind of enforcement action and sought court intervention to block it. Kalshi has long maintained that its predictive markets, allowing people to buy and sell "contracts" tied to the outcome of an event, is not governed by gambling laws but federal commodities laws.
But U.S. District Court Judge Robert Shelby ruled on Tuesday that "the federal law relied upon by Kalshi does not preempt Utah’s ability to enforce its anti-gambling laws."
It handed Utah political leaders a huge win in their long-running feud with predictive markets, which have exploded in popularity. Governor Spencer Cox praised the ruling, saying in a post on X: "Prediction markets are gambling, full stop. They are causing tremendous harm to countless American families. Today’s ruling affirms that Utah’s anti-gambling laws are an appropriate way to protect our citizens and are not preempted by federal law."
Utah can crack down on Kalshi under anti-gambling laws, judge rules:
Brown said he believed predictive markets were harming Utah youth.
"Having the device, the gambling device, not located in the deserts as we've always had it in casinos, but now that literally, it's in every kid's pocket and it is flooding them with those dopamine hits of constant notifications and streaks and all those kinds of things," he said. "That's why we're very serious about this issue and tackling this head on, because it has a, I believe, it's a devastating impact on our kids."
A spokesperson for Kalshi told FOX 13 News on Tuesday it would appeal Judge Shelby's ruling.
"We disagree with today's decision and will appeal. Multiple courts have already recognized that prediction markets fall under exclusive federal jurisdiction, and we will continue to defend that position," the company said in a statement.
But asked specifically about enforcement action against Kalshi and other prediction market companies, Brown would not say what would happen yet. State officials could seek to force Kalshi and similar companies to block Utah from its technologies, as other states have sought to do.
"We have a not only state law that prohibits gambling, we have a state constitution that prohibits gambling. We're one of two states in the country that have that kind of prohibition. So that puts us, when it comes to your question of enforcement, that puts us in a really unique and I would say powerful spot from that standpoint," Brown told FOX 13 News. "We will continue to keep you apprised on what it is we're doing and we'll keep looking at this with our team of lawyers in terms of what that looks like moving forward. But ultimately, I'm pleased with the outcome and I feel like this is a great victory for Utah."
Kalshi has been blocked from operating in Nevada following court rulings there, KTNV in Las Vegas reported.
Brown acknowledged that Utah's case could wind up before the U.S. Supreme Court. The Trump administration has supported predictive markets in their battles with state regulators, but Utah got support from an unusual source: The American Gaming Association is an industry group that supports the gambling industry and has waged a campaign against predictive markets, whom they accuse of taking more than $1 billion in taxable revenue from sports betting in regulated gambling states.
The group praised Utah leaders, even though the state prohibits gambling in all forms.
"A Utah judge’s final decision reaffirms that the authority to regulate gambling rests with the state. We agree with Attorney General Brown and 43 other state attorneys general that sports gambling is sports gambling – the so-called 'prediction markets' can’t rebrand it and offer it outside the law. The AGA applauds Governor Cox and Attorney General Brown for upholding Utah’s laws and protecting its residents," the group said Wednesday.
