A federal judge in Utah has ruled in favour of the state, allowing it to apply its anti-gambling laws to Kalshi’s sports betting operations. The ruling grants Utah summary judgment in a lawsuit filed by Kalshi, emphasising the state’s authority over gambling activities within its borders.
US District Judge Robert J. Shelby determined that federal commodities law does not preempt Utah’s ability to prohibit gambling.
Kalshi, which filed the lawsuit in February, argued that its status as a federally registered exchange exempt it from being treated as a gambling entity under Utah law. However, the court rejected Kalshi’s arguments, reinforcing the state’s jurisdiction over gambling matters.
The court explained that gambling has historically been regulated by states, with Congress supporting state authority since the early 19th century. Judge Shelby found it unlikely that Congress would have intended to alter this position through legislation aimed at the 2008 financial crisis.
Derek Brown, Utah Attorney General (above), said: “You can’t rebrand illegal gambling as a federal commodity, and today a federal judge agreed with us. Kalshi bet that clever branding would beat Utah law. Kalshi lost and Utah won.
“Utah’s constitution bans gambling to protect Utah families, and my office will enforce that ban. Gambling is gambling no matter what any company calls it.”
In Utah, providing online gambling services is considered a third-degree felony. The court determined that Kalshi’s federal registration does not exempt its operations from Utah’s gambling restrictions. In support of Utah’s position, 23 federally recognised tribes and gaming associations rallied behind the state’s anti-gambling stance.
Ultimately, the court’s decision to grant summary judgment for Utah and close the case underscores the strength of state-enforced gambling prohibitions.
