Key facts
- The Trump administration, through the CFTC, is suing Utah to prevent the state from enforcing its gambling ban against Kalshi.
- Utah's Attorney General argues Kalshi operates an illegal online casino and violates state law and the state constitution.
- The CFTC asserts its exclusive federal jurisdiction over prediction markets and claims state laws obstruct federal regulation.
- A federal judge previously ruled that federal law did not preempt Utah's anti-gambling laws.
- The case highlights a circuit split on whether states can regulate prediction markets, potentially leading to a Supreme Court decision.
The Trump administration, via the Commodity Futures Trading Commission (CFTC), has filed a lawsuit against Utah, marking the tenth such action against states attempting to ban gambling on prediction markets. Utah's Attorney General, Derek Brown, argues that Kalshi operates an illegal online casino and violates state laws and the state constitution, which has prohibited gambling for 130 years. The CFTC contends that it has exclusive federal jurisdiction over these markets and that state actions obstruct federal regulation. This legal battle follows a previous federal court ruling where a judge sided with Utah, determining that federal law did not preempt the state's ability to enforce its anti-gambling statutes. Kalshi is currently appealing that decision.