Utah files criminal charges against Kalshi Prediction Market and company co-founders | American news

Utah filed criminal charges Wednesday against prediction market operator Kalshi and two of its executives, months after a federal judge rejected Kalshi’s efforts to block Utah from enforcing its strict anti-gambling laws against the activity.

The criminal charges could represent a new tactic in how states try to assert regulatory authority over this rapidly expanding activity, a standoff that appears headed for a showdown before the U.S. Supreme Court.

The charges include 13 counts of violating the state’s ban on gambling and another charge of profiting from illegal activities.

State charging documents name Kalshi and his co-founders, CEO Tarek Mansour and COO Luana Lopes Lara.

In a statement, Utah Attorney General Derek Brown said Kalshi continued to operate in Utah, despite a federal court ruling that Utah’s gambling laws applied to the business.

“Gambling is illegal in Utah, whether you bet, run the game or promote it. Calling it a ‘prediction market’ doesn’t change what it is, and being federally registered does not put a business above the law,” Brown said in a statement.

The attorney general’s office did not immediately indicate what type of criminal sanctions it would seek in the case, although criminal charges carry the possibility of prison time.

In a statement, Kalshi called the accusations “crazy overreach” and said “Utah is clearly playing politics.”

“We look forward to putting an end to this in court, just like we did in Arizona,” he said.

Utah is on the front lines of a battle between states and the federal government over who regulates markets. The litigation has spread to around 20 states, creating a fragmented legal landscape that analysts say will likely be resolved by the Supreme Court.

Kalshi argued that prediction markets fall exclusively under federal jurisdiction and are not governed by state gambling laws.