Utah Indicts Kalshi and Co-Founders on Felony Gambling Charges

Utah prosecutors filed felony charges against the prediction market platform Kalshi and its two co-founders on Wednesday. The criminal complaint marks the first time a state has indicted a major prediction market operator and its executives for operating within its borders.

The charging documents list 13 counts for violating the state’s gambling prohibition. Prosecutors also included one additional charge for profiting from illegal activity. The indictment names the corporate entity as well as chief executive officer Tarek Mansour and chief operating officer Luana Lopes Lara. Because the charges are felonies, the defendants face the potential for incarceration if convicted.

Utah Attorney General Derek Brown defended the move in a written statement. He noted that Kalshi continued to operate in the state after a federal judge ruled that local gambling laws applied to the company. Brown stated that gambling is illegal in Utah whether an individual places a bet, runs the game, or promotes it. He argued that labeling the product a prediction market does not alter its legal nature and that federal registration does not exempt a company from state law.

Kalshi rejected the charges in its own statement. The company described the action as a crazy overreach and accused the state of playing politics. Representatives for the firm said they look forward to resolving the dispute in court, citing a similar outcome in Arizona.

This legal conflict places Utah at the center of a growing tension between state and federal regulatory authority. Litigation involving prediction markets has expanded to approximately 20 states, creating a fragmented legal environment. The dispute is expected to reach the US Supreme Court for a definitive ruling.

Kalshi has consistently maintained that prediction markets fall exclusively under federal jurisdiction. The company contends that state gambling laws do not apply to its specific business model, a stance that has driven the ongoing legal battles across the country.