CFTC Suing Utah to Block Action Against Kalshi
Mike Goodpaster Published 28/10/2026
The CFTC has filed suit against the state of Utah to block its attempt to shut down Kalshi's sports-event contracts. The lawsuit follows Utah’s decision to file civil enforcement actions in state court against CFTC-regulated markets and other businesses. Lawyers representing the CFTC argue that Utah’s effort to restrict the functioning of CFTC-registered exchanges obstructs Congress’s decision to federally preempt state law. The Department of Justice joined the filing.
This action follows the decision by Utah Attorney General Derek Brown to sue Kalshi. Utah’s original complaint was filed in the Third District Court in Salt Lake County. Named as defendants in the suit were Kalshi and two Susquehanna trading firms.
The CFTC goes on a counter-offensive
The argument being put forth in the filings by the Commodity Futures Trading Commission (CFTC) isn't really covering any new territory. It states that as a federal regulator, the CFTC's rules governing prediction markets supersede any state law.
"The Commodity Exchange Act provides a comprehensive framework for the regulation of commodity derivatives transactions in the United States," reads the filing. "This federal law gives the CFTC, a federal agency, 'exclusive jurisdiction' over the regulation of commodity futures, options, and swaps traded on federally regulated exchanges.
"The United States and the CFTC bring this action to halt Defendants’ efforts to prohibit the operation of derivatives markets governed by federal law."
It's also becoming a pattern that the CFTC intends to vigorously defend any prediction market site that faces legal action from state attorneys general or state gaming regulators.
CFTC Chair Selig is also talking tough
In a prepared statement, the CFTC indicated that it will continue to draw a clear line on these matters. If a state challenges what it views to be the lawful operation of a derivatives exchange, the CFTC says it will protect federal sovereign interests. The CFTC has also initiated legal proceedings against nine other states. It has submitted briefs in four federal courts of appeal and one state supreme court.
"Utah seeks to shut down prediction markets across a wide variety of markets,” CFTC Chairman Michael S. Selig said in a statement. “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.”
Utah coming after Kalshi for big money
The filing of the original suit by Utah AG Brown was on October 20. In the filing, the Utah AG office was drawing comparisons between Kalshi and back-alley gambling dens. It also describes the prediction market site as a public nuisance.
Brown is citing Kalshi's sports, politics, and culture event contracts as exhibiting a brazen pattern of violating Utah's strict gambling laws. The suit is seeking to recover between $30.6 million and $61.2 million in fees and profits.
More than 32,000 people in Utah have accounts with Kalshi.
“Utah has said no to gambling since statehood in 1896, and that didn’t change when betting moved onto cell phones,” Brown told KUTV.
"These companies, they're not your friends. They're not helping you invest. They're not providing you with insight or opportunity. Frankly, they are engineered to do one thing and one thing alone, and that is: Empty your wallet."