Utah has sued Kalshi companies and two Susquehanna trading firms over allegedly illegal betting, extending the state’s confrontation with prediction markets to businesses providing liquidity as well as the platform taking customer orders.
Attorney General Derek Brown announced the October 20 action in Utah’s Third District Court. The state seeks restrictions on the activity and monetary relief, while Kalshi maintains that its federally regulated derivatives market is governed by federal law.
The filing begins a new enforcement action. Its accusations and requested remedies are not findings that the defendants have committed the alleged conduct or that the court has already granted a shutdown.
The complaint reaches beyond the platform operator
The named defendants include Kalshi affiliates and Susquehanna International Group and Susquehanna Government Products. Utah argues that firms taking the other side of customer positions participate in the betting business it is challenging.
That expands the dispute beyond the familiar question of whether an exchange may list a particular event. A market also needs counterparties willing to trade, and those firms can face a different assessment of the legal and commercial risk when a state names them directly.
A liquidity provider’s participation does not determine the legal outcome by itself. The court still needs to consider the claims against each defendant, the applicable law and the arguments about federal and state authority.
Utah seeks money and limits on access
The complaint estimates that Kalshi collected between $30.6 million and $61.2 million in fees from Utah accounts, according to Utah News Dispatch’s account of the filing. The state seeks money it says was obtained unlawfully, alongside other relief.
Those figures are estimates advanced by the plaintiff, not an audited revenue finding or a damages award. The amount ultimately established, and whether any payment is required, depend on evidence and court decisions that have not been supplied by the act of filing.
Utah also wants to prevent residents from accessing the challenged contracts. The dispute therefore concerns the practical reach of the service within the state, as well as how event contracts are described.
Kalshi continues to contest state authority
Kalshi told KSL that it operates a federally regulated financial exchange where customers trade with one another, and rejected the idea that an individual state should control that market. It also said the new state-court action does not alter its continuing federal litigation.
The distinction matters because the earlier federal case and this new complaint are separate proceedings. Utah previously prevailed in its dispute over the application of state gambling law, while Kalshi has continued to challenge that outcome.
A new lawsuit can create another route to enforcement without resolving every appeal or jurisdictional question. Similarly, federal registration is the basis of Kalshi’s position, rather than proof that the new state claims have already failed.
For prediction-market operators and their trading partners, the next meaningful developments are the defendants’ responses and any court decision on requested restrictions. The October 20 filing broadens the parties facing that dispute, while leaving the central legal contest open.