Utah sues Kalshi and its market maker Susquehanna, calling the prediction market a "back-alley gambling den" and seeking up to about $60 million

Utah has taken the fight over prediction markets to a new target. Attorney General Derek Brown sued Kalshi and two Susquehanna trading firms on Tuesday in Utah's Third District Court, SBC Americas reported, alleging that they run an illegal gambling business in a state that has banned gambling since it joined the union in 1896. The complaint, described by The Block, compares KalshiEx to the manager of a "back-alley gambling den" and says Kalshi Trading and the Susquehanna firms act like a betting house, taking the other side of users' bets and profiting when they lose.

The numbers are large. Utah estimates Kalshi collected about $30.6 million to $61.2 million in fees from Utah accounts through October 19, per The Block, and Cointelegraph reported the state wants roughly $30 million to $60 million returned. The suit also asks the court to stop sports, election, political, cultural and "mentions" contracts in Utah and to require tighter location checks. Sports and gaming lawyer Daniel Wallach said it is the first time a state attorney general has gone after the market makers behind a prediction market, The Block reported.

Kalshi says the state has no say. Spokesperson Jacki McGavick told Cointelegraph that Kalshi is a federally regulated financial exchange, comparable to the stock market, and that the case does not affect its federal litigation. That litigation has gone badly for Kalshi in Utah: it sued the state in February, lost on summary judgment in August, and in September the Tenth Circuit refused to block Utah's enforcement while the appeal proceeds, per SBC Americas. Brown said the case belongs to a wider investigation and suggested other platforms could be pursued, per The Block, and he told other companies to read the complaint and follow Utah law, per SBC Americas.