The US Commodity Futures Trading Commission has filed a lawsuit against the State of Utah and Attorney General Derek Brown. The federal regulator seeks to block state-level legal action targeting the prediction market platform Kalshi and its affiliates.
Utah officials previously announced plans to sue Kalshi to recover up to $60 million in profits, which the state claims were obtained through illegal betting activities. The CFTC argues that these event contracts are classified as swaps under the Commodity Exchange Act.
According to the federal regulator, Kalshi operates as a CFTC-regulated Designated Contract Market. The lawsuit states that Utah's intervention attempts to bypass federal preemption and interferes with the exclusive jurisdiction of the commission over commodity derivatives markets.
This case follows a series of similar legal disputes between state authorities and prediction market platforms. Similar actions are currently pending in states including New Jersey, Michigan, Ohio, Kentucky, Nevada, Massachusetts, Wisconsin, and New York, with potential resolution likely requiring a Supreme Court ruling.
