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- Utah sued Kalshi and two Susquehanna firms on Oct. 20 to seek trading restrictions and the repayment of allegedly unlawful profits.
- Attorney General Derek Brown filed the civil complaint in Utah’s Third Judicial District Court in Salt Lake County.
- Kalshi has appealed an August federal court ruling that rejected its argument that federal commodities law prevents state gambling restrictions.
Utah sued Kalshi and two Susquehanna firms on Oct. 20, seeking trading restrictions and repayment of allegedly unlawful profits. The action also targets trading firms that allegedly take the opposite side of customers’ positions.
Utah Seeks Restrictions on Event Contracts
Attorney General Derek Brown filed the civil complaint in Utah’s Third Judicial District Court in Salt Lake County. It names five Kalshi entities, Susquehanna International Group and Susquehanna Government Products.
Utah asks for preliminary and permanent injunctions covering sports, election and politics, culture, and “mentions” contracts. Mentions contracts concern whether specified words or phrases are spoken during an event.
The state also wants court-approved third-party location checks to enforce the restrictions. These are requested remedies, rather than restrictions imposed by the filing itself.
Utah Targets Susquehanna’s Market-Making Activities
The complaint alleges the Susquehanna firms participate by taking positions opposite retail customers, including Utah residents. Their inclusion extends the case beyond Kalshi’s operation of the exchange to trading firms that help provide liquidity.
Utah brings claims including unjust enrichment and civil conspiracy, seeking repayment of profits, restitution, and damages. Using estimated fees of 1–2 cents per wager, Utah calculates that Kalshi collected approximately $30.6 million to $61.2 million from Utah accounts through Oct. 19. The complaint acknowledges that actual activity could differ from its estimates.
Kalshi Defends Federal Oversight After Earlier Utah Ruling
Kalshi maintains that it operates a federally regulated financial exchange and that individual states should not control access to its markets. In a statement following the lawsuit, the company said the state action does not affect its continuing federal litigation.
The new complaint follows a separate federal case Kalshi brought against Utah in February. U.S. District Judge Robert Shelby granted Utah summary judgment in August, rejecting Kalshi’s argument that federal commodities law prevented the state from enforcing its gambling restrictions against sports contracts.
Kalshi has appealed the August ruling to the Tenth Circuit Court of Appeals. The new state lawsuit separately seeks restrictions and monetary recovery from the named defendants.
