Utah sues Kalshi and Susquehanna, seeking up to $61 million over “illegal gambling”
Utah’s attorney general filed a state-court lawsuit on 20 October 2026 against Kalshi and two Susquehanna trading firms, arguing the market makers act as the house. What the suit asks for and why it is different.
In this article
Utah sued Kalshi and two Susquehanna trading firms on 20 October 2026, accusing them of running illegal gambling in a state that bans every form of it. Attorney General Derek Brown filed the civil case in Utah's Third District Court.
What Utah is asking for
- A ban on most of Kalshi's markets in Utah: sports, elections, politics, culture and "mention" contracts.
- A court-approved geolocation provider, so Kalshi cannot be reached from inside the state.
- Its money back: Utah estimates Kalshi earned $30.6 million to $61.2 million in fees from Utah users and wants those profits recovered.
The complaint says the conduct has been going on since September 2024.
Why the market makers are named
Utah's novel argument is that the firms providing liquidity, Kalshi's own trading affiliate and two Susquehanna companies, act like a betting house: they take the other side of users' trades and profit when users lose. Most state cases so far have targeted only the exchange. Market makers are a normal part of any exchange (how Kalshi makes money), so how a court treats this claim could matter well beyond Utah.
How Utah got here
| When | What happened |
|---|---|
| February 2026 | Kalshi sues Utah in federal court to stop enforcement |
| 4 August 2026 | A federal judge rules that federal commodities law does not override Utah's gambling ban for sports contracts |
| 8 September 2026 | The Tenth Circuit refuses to protect Kalshi while it appeals |
| 20 October 2026 | Utah files its own suit in state court |
Offering online gambling to people in Utah is a third-degree felony under state law, although this case is civil.
What Kalshi says
Kalshi maintains that it is a federally regulated exchange overseen by the CFTC and that its federal appeal is unaffected. It had not responded in detail to the new suit at the time of reporting.
What it means for traders
Kalshi was still operating in Utah when the suit was filed. If the court grants Utah's requests, Utah users would lose access to most markets. Utah's full picture: is Kalshi legal in Utah?. The wider state-by-state fight: is Kalshi legal?.
