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Court keeps Utah's prop betting ban in force during Kalshi appeal

Court keeps Utah's prop betting ban in force during Kalshi appeal

Rule Changes Salt Lake City, UT local

Utah charges Kalshi and two executives with a felony while the state's betting ban stays in force on appeal; the CFTC sues Utah in response

October 28th, 2026: Utah files felony charges against Kalshi and two executives

Overview

Updated Sep 29

Utah has pushed its fight with Kalshi from civil court into criminal court. On Oct. 28 the state charged the prediction market and two of its executives with a felony over bets offered in Utah, after a federal judge refused to pause the state's ban while Kalshi appeals.

The 10th Circuit declined on Sept. 8 to lift that ban during the appeal. The Commodity Futures Trading Commission then sued Utah on Oct. 27, saying state enforcement causes irreparable harm to federal regulation of event contracts. Kalshi has lost in the Ninth and Sixth circuits and at the 10th Circuit's stay stage, while the Supreme Court waits on New Jersey's petition over a Third Circuit win.

Why it matters

If Utah's felony case holds, states can threaten jail for executives of federally registered prediction markets, not just civil penalties.

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Key Indicators

Felony
Criminal charges Utah filed against Kalshi and two executives
Filed Oct. 28, 2026, after a federal judge refused to pause the state's gambling ban.
10
States the CFTC has sued over prediction market enforcement since April
Utah, sued on Oct. 27, joined Arizona, Connecticut, Illinois, Kentucky, Minnesota, New Mexico, New York, Rhode Island and Wisconsin.
$400K
Winnings from a war-outcome bet tied to classified leaks
An Army soldier was charged in April with using classified raid details to win the bet on an online market.
23
Tribes and gaming associations backing Utah as amici
The groups supported the state's position that its gambling ban applies to Kalshi's contracts.
Denied
Appeals court stay of the ban pending appeal
The 10th Circuit refused on Sept. 8 to pause enforcement while Kalshi appeals.
1-2
Kalshi's record in circuit court decisions on sports contracts
Won in the Third Circuit against New Jersey; lost in the Ninth Circuit (Nevada) and the Sixth Circuit (Ohio and Tennessee). The 10th Circuit also refused to pause Utah's ban during its appeal.

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People Involved

Tarek Mansour
Tarek Mansour
Co-founder and chief executive of Kalshi
Leading Kalshi's appeals against state gambling bans after losses in the Ninth, Sixth, and 10th circuits
 Derek Brown
Derek Brown
Utah Attorney General
Filed felony charges against Kalshi and two executives on Oct. 28, 2026; defending the state's ban on appeal
 Spencer Cox
Spencer Cox
Governor of Utah
Pushed for the 2026 law clarifying prop betting as gambling
 Robert J. Shelby
Robert J. Shelby
U.S. District Judge, District of Utah
Granted summary judgment for Utah; ruling now on appeal

Organizations Involved

Kalshi
Kalshi
Prediction market
Charged with a felony by Utah on Oct. 28; appealing the state's ban to the 10th Circuit

A federally registered exchange where users trade event contracts on outcomes from elections to sports scores; Utah has charged it with a felony.
Commodity Futures Trading Commission
Commodity Futures Trading Commission
Federal regulator
Sued Utah on Oct. 27 over the state's enforcement against Kalshi; has sued 10 states since April

The independent federal agency that oversees futures, swaps, and event contract markets.
U.S. Court of Appeals for the 10th Circuit
U.S. Court of Appeals for the 10th Circuit
Federal Appellate Court
Hearing Kalshi's appeal of the Utah ruling

The federal appeals court covering Utah and five other western states.

Timeline

February 2026 October 2026

8 events Latest: October 28th, 2026 · 2 weeks ago
Tap a bar to jump to that date

  1. Utah files felony charges against Kalshi and two executives

    Latest Legal

    Utah charged the prediction market operator and two executives with operating an illegal gambling business, a felony that can carry jail time. Attorney General Derek Brown said federal registration does not put a company above state law.

  2. CFTC sues Utah over its Kalshi enforcement

    Legal

    The Commodity Futures Trading Commission sued Utah, arguing state enforcement against prediction markets causes irreparable injury to federal regulation. Utah is the 10th state the agency has sued since April.

  3. Utah sues Kalshi to stop trading in the state

    Legal

    Utah filed a civil suit against Kalshi and several related companies asking a state court to halt trading on sports, elections, politics and culture outcomes in Utah. The Associated Press reported the suit in its Oct. 28 story as filed the week before.

  4. Appeals court keeps ban in force

    Court ruling

    The 10th Circuit declines to pause Utah's prop betting law while the appeal proceeds.

  5. Judge sides with Utah on preemption

    Court ruling

    Judge Shelby grants Utah summary judgment; commodities law doesn't override the state gambling ban.

  6. Kalshi says it will appeal Utah ruling

    Legal

    After the Aug. 4 district court loss, Kalshi says it plans to appeal to the 10th Circuit. Its appeal is pending there by early September, when the court rules on a request to pause the ban.

  7. Utah clarifies prop betting is gambling

    Legislation

    Lawmakers pass and the governor signs a bill stating prop betting falls under the state's constitutional gambling ban.

  8. Kalshi sues Utah over prop betting ban

    Legal

    Kalshi asks a federal court to block Utah from enforcing its new prop betting ban.

Scenarios

1

10th Circuit upholds Utah's prop betting ban

Likely Resolves by End of 2027

Discussed by: Utah Attorney General's office and state officials, who won at the district court

The 10th Circuit affirms Judge Shelby's ruling that the Commodity Exchange Act preserves state gambling jurisdiction. Kalshi's prop bets stay blocked in Utah. The company could then petition the Supreme Court, though the Court takes few cases and would weigh whether a circuit split exists.

2

10th Circuit reverses, clearing Kalshi in Utah

Unlikely Resolves by End of 2027

Discussed by: Kalshi and prediction market advocates citing the 2024 D.C. ruling that allowed its election contracts

The 10th Circuit finds the Commodity Exchange Act preempts state gambling law or that Kalshi's contracts aren't gambling, letting the company resume prop bets in Utah. A decision against Utah could conflict with the D.C. Circuit's election-contracts ruling, drawing Supreme Court review.

3

Congress bans sports-style event contracts

Possible Resolves by Jan 3, 2027

Discussed by: Utah Sen. John Curtis and Rep. Blake Moore, who introduced bills in 2026

Congress passes a law barring CFTC-regulated markets from offering contracts that resemble sports betting or casino games, or that track wars, elections, and government actions. The statute would moot the Utah case while creating a national rule for prediction markets.

4

Supreme Court settles whether federal law shields prediction markets

Possible Resolves by Q2 2027

Discussed by: The Block and nextpredict, covering New Jersey's cert petition and the circuit split

New Jersey has asked the Supreme Court to review the Third Circuit ruling that favored Kalshi, and the petition is docketed. The Sixth Circuit's September loss for Kalshi in Ohio and Tennessee widens the split, since that court found Kalshi's sports contracts are not federally regulated swaps. The Court could decide whether the Commodity Exchange Act preempts state gambling laws.

5

Utah's criminal case against Kalshi goes to trial

Uncertain Resolves by End of 2027

Discussed by: Daniel Wallach, a lawyer who specializes in sports wagering and gaming law at the University of Miami

Utah filed felony charges against Kalshi and two executives on Oct. 28, a move Wallach said could mark a shift by states that have mostly brought civil suits. A trial would test whether a state gambling ban reaches the executives of a federally registered exchange. The attorney general's office has not said what penalties it will seek.

Historical Context

3 moments from history that rhyme with this story — and how they unfolded.

September 2024

Kalshi v. CFTC (2024)

D.C. District Judge Jia Cobb ruled the CFTC overstepped by blocking Kalshi's election contracts, saying the agency couldn't ban contracts just because betting on them might undermine public confidence. Kalshi began offering congressional control markets within days.

Then

Prediction markets expanded into U.S. elections, with heavy trading on the 2024 presidential race.

Now

Established that CFTC-registered exchanges can offer event contracts absent explicit commission rules, fueling the state pushback Utah's law represents.

Why this matters now

The preemption argument Kalshi won in Washington failed in Utah, showing how the fight over prediction-market jurisdiction is playing out differently across courts.

May 2018

Murphy v. NCAA (2018)

The Supreme Court struck down the Professional and Amateur Sports Protection Act, the 1992 federal law that barred most states from legalizing sports betting. The ruling returned the decision to the states.

Then

New Jersey and then dozens of states legalized sports betting within a few years.

Now

Affirmed that states, not the federal government, set gambling policy within their borders—the principle Utah now leans on.

Why this matters now

Utah's argument echoes Murphy: states hold authority to ban or allow gambling, and federal commodities law doesn't strip that power.

1900s-1930s

Bucket shop crackdown (early 1900s)

Bucket shops let people bet on stock and grain prices without taking real positions, and states treated them as illegal gambling. The Grain Futures Act of 1922 and the Commodity Exchange Act of 1936 drew a line between these gambling operations and legitimate futures exchanges.

Then

Federal regulation of futures created an orderly market while states kept anti-gambling laws on the books.

Now

The Commodity Exchange Act's structure of overlapping state and federal authority persists—and is now at the center of the Kalshi case.

Why this matters now

The current fight reprises an old question: where does speculation end and gambling begin, and which level of government gets to decide.

Sources

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KSL.com Utah Attorney General's Office The Block nextpredict.io InGame U.S. Court of Appeals for the 10th Circuit ABC News KUTV SBC Americas Ars Technica KSL.com