Trump admin sues Utah to save Kalshi from the state's total ban on gambling

The Utah attorney general’s office declined to comment today on the CFTC lawsuit. The CFTC previously filed lawsuits against Arizona, Connecticut, Illinois, Kentucky, Minnesota, New Mexico, New York, Rhode Island, and Wisconsin. The federal agency also filed briefs supporting Kalshi in appeals court cases.

“Utah seeks to shut down prediction markets across a wide variety of markets,” CFTC Chairman Michael Selig said. “Event contracts do not just serve hedging and investment purposes—they also provide the public with information about the outcome of future events. Congress entrusted the CFTC to be the federal regulator with sole responsibility to oversee these markets. As I’ve said before, the CFTC has the expertise and responsibility to defend its exclusive jurisdiction over commodity derivatives, and that’s exactly what we’ll do.”

The US Commodity Exchange Act gives the CFTC authority to regulate swaps. The key legal questions being grappled with by courts throughout the US are whether event contracts offered by prediction markets qualify as swaps, and whether the CFTC jurisdiction over swaps preempts states from applying their gambling laws.

US sues in same court where Utah beat Kalshi

The CFTC is suing Utah in the same US district court that previously ruled in Utah’s favor. Kalshi sued Utah in February in an attempt to stop the state from bringing an enforcement action against the prediction market.

In August, US District Judge Robert Shelby granted Utah’s motion for summary judgment and denied Kalshi’s motion for a preliminary injunction. Shelby wrote, “[T]he court concludes the federal law relied upon by Kalshi does not preempt Utah’s ability to enforce its anti-gambling laws.”

Shelby determined the text of US law makes it clear that state regulation is not forbidden. US law states that CFTC jurisdiction does not “supersede or limit the jurisdiction conferred on courts of the United States or any State,” and “explicitly provides for State regulation of its gaming laws in all but a few specified cases,” he wrote.