SALT LAKE CITY — A lawsuit has been filed against Governor Spencer Cox and Attorney General Derek Brown in a pre-emptive strike over predictive markets.
Kalshi, an app and website that allows people to trade on the outcome of real-world events, filed the lawsuit alleging that comments made by the governor and attorney general suggest Utah "...will imminently bring an enforcement action against Kalshi with the intent to prevent Kalshi from offering event contracts for trading on its federally regulated exchange."
"Defendants have repeatedly represented that they believe Kalshi is operating unlawfully under Utah anti-gambling laws," the company said in its lawsuit.
Utah has a constitutional prohibition on gambling. Kalshi insists it is not running afoul of that and is regulated by the federal government. It seeks an injunction from a federal judge blocking Utah from taking any sort of action against it.
"These contracts are subject to exclusive federal oversight, and—critically—they are lawful under federal law," the lawsuit said.
Kalshi did not return an email from FOX 13 News seeking comment. Gov. Cox and Attorney General Brown declined to comment on the lawsuit on Wednesday.
The lawsuit hits as a similar bill is making its way through the Utah State Legislature. Rep. Joseph Elison, R-Toquerville, is sponsoring House Bill 243 that would ban "proposition betting."
"It’s just a bet that's a one-in-time type of thing," Rep. Elison said Wednesday. "For example, if a quarterback is going to throw three touchdowns in this game. You drop a bet on something like that."
The bill has passed the Utah House of Representatives and is currently in the Senate. Rep. Elison told FOX 13 News he considered amending his bill to include predictive markets after the Kalshi lawsuit hit.
"The bill is not going to change. We’re going to move the bill as it is. We had that conversation. We’re not going to change the bill. The lawsuit is going to move forward," he said.
