Kalshi’s Bid to Halt State Gambling Enforcement Fails Again in Utah

Kalshi’s latest effort to shield itself from Utah’s gambling laws has been struck down, with the court siding firmly with the state.

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Judge Robert Shelby ruled that the federal statutes Kalshi leaned on do not override Utah’s authority, writing that “the court concludes the federal law relied upon by Kalshi does not preempt Utah’s ability to enforce its anti-gambling laws.”

The company had argued that language changes in the Dodd‑Frank Act gave room for federal preemption, but Shelby dismissed that as “implausible,” stressing that gambling has “traditionally [been] regulated by the states, not the federal government.” 

He pointed to Supreme Court precedent affirming Congress’s long history of backing state control over gambling policy, noting it was “simply implausible that Congress would silently reverse course through an Act addressing the 2008 housing financial crisis.” 

Shelby also rejected Kalshi’s claim that it cannot meet both federal and state requirements. He wrote, “Kalshi has not demonstrated it would be impossible to comply with both Utah anti gambling law and the CEA.” 

The judge highlighted that Kalshi’s own contracts already list trading prohibitions for certain groups, and adding another category under Utah law “does not appear to be onerous.”

Kalshi continues to hit roadblocks around the country

The setback in Utah adds to a growing list of defeats for Kalshi as prediction markets face scrutiny across multiple states.

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In New York, Attorney General Letitia James filed suit seeking $36 billion and the shutdown of Kalshi’s operations, moving quickly after courts refused to block the state gaming commission’s cease‑and‑desist order issued last October.

Elsewhere, the Sixth Circuit Court of Appeals recently heard arguments on conflicting rulings from Ohio and Tennessee. 

Judges pressed Kalshi’s lawyers on their claim that the Commodity Exchange Act overrides state authority, with Judge Eric Clay remarking, “There’s no express statement in the statute that Congress has said that licensure regarding gaming should be transferred from the state to the federal government. That just doesn’t exist.”

Kalshi also agreed to exit Nevada by August 12 after failing to geoblock users there, a move that undermines its argument for nationwide regulation under the CFTC. 

In Washington, a local judge barred the company from offering sports contracts, ruling that it “operates an online betting platform.” The only recent win came in Minnesota, where a district judge temporarily blocked enforcement of a new law banning prediction markets, giving Kalshi a brief reprieve amid a string of unfavorable outcomes.

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Source: SBC Americas