Utah AG Sues Kalshi and Susquehanna in State Court

Utah's Attorney General sued five Kalshi companies and two Susquehanna trading firms in Salt Lake County state court on October 20, 2026, seeking an order stopping Kalshi's sports, election, politics, culture and "mentions" contracts in Utah, plus restitution for the state and its residents.

This is a different case from the one we have been tracking. That one was Kalshi suing Utah in federal court. The company lost in the District of Utah on August 4, and the Tenth Circuit refused to pause that ruling on September 8. This time the state is the plaintiff, the court is a state court, and the complaint asks for money as well as an order to stop.

What has happened between Utah and Kalshi so far?

Who did Utah sue, and what does it claim?

The caption of the 63-page "Verified Complaint and Jury Demand" names seven companies: Kalshi Inc., KalshiEX LLC, Kalshi Klear Inc., Kalshi Klear LLC, Kalshi Trading LLC, Susquehanna International Group, LLP and Susquehanna Government Products LLLP, plus Does 1-100. The copy we read was published by the trade outlet InGame. It is signed by Assistant Solicitor General Joshua B. Cutler but has a blank case number. The Utah Attorney General's own website blocked our requests, so we could not get the complaint from the state directly. The Salt Lake Tribune and KSL both reported that the case was filed in 3rd District Court. KUER's report describes Kalshi as "the only named defendant", but the caption of the complaint names all seven companies.

The complaint sets out five claims. Two of them are both headed "Count IV":

The state's central allegation is that, "From a user's perspective, Kalshi's online gambling bets are indistinguishable from the bets offered by a traditional sportsbook." It also alleges that Kalshi started offering these bets in Utah "by at least September 2024". The state describes the Susquehanna firms as "market makers" that take "positions opposite retail bettors' gambling wagers, including wagers placed by Utah residents." The complaint cites Utah Code sections 76-9-1402 through 1405, 1407 and 1408, plus the election-wagering ban in section 20A-1-606. All of these are allegations, and no court has ruled on them.

Kalshi denies that the state has authority over it. KUER quotes the company: "Kalshi answers to federal law, and no single state should have a veto over it." KUER also reports Kalshi's position that the state case does not affect its federal appeal. We have no response from Susquehanna.

How much money is Utah asking for?

The complaint doesn't name a final figure. It asks for restitution and damages "in an amount to be determined at trial", and says that amount will "compensate the State and those within the State for losses suffered". It also asks for disgorgement, abatement costs, punitive damages and fees.

The large numbers in the headlines are the state's own estimates, and the complaint shows how it built them. The starting point is a February 25, 2026 declaration by Kalshi's head of markets, Xavier Sottile, filed in Kalshi's earlier lawsuit against the state. It said 55,819 Kalshi accounts were registered with a Utah address, 32,940 of them fully signed up. It also said those accounts held more than five million dollars' worth of open positions. The state compares that figure with about $451.29 million in open positions across all of Kalshi on the same day, which gives Utah a share of about 1.11 percent. It then applies that share to the 275.6 billion $1 contracts it says Kalshi has taken in sports, politics, elections, culture and mentions markets. The complaint counts every contract as a separate wager. That is where its figure of "more than 3,059,160,000" Utah wagers by October 19, 2026 comes from. At a fee of "$0.01 to $0.02 per wager", the state gets between $30,591,600 and $61,183,200 in fees. InGame disputes that range. It reports that Kalshi's fees run from $0.0007 to $0.0175 per contract, and on those rates puts the Utah total "likely closer to $22.7 million." Separately, the state estimates that Kalshi received "at least $5.5 million in gambling profits from Utah residents as of May 2026". It gets there by assuming Utah users lost in proportion to $583.5 million in losses across all retail users. A footnote says these are "estimates based on publicly available information" and that the real figures "could be more or less".

What happens to Utah Kalshi users now?

Nothing changes yet. The complaint asks for preliminary and permanent injunctions. It also asks the court to require Kalshi to use "a third-party geolocation services provider" approved by the court. No order has been entered. The state alleges that Kalshi was still offering these contracts in Utah when it filed.

If you hold Kalshi positions with a Utah address, the restitution request is the part that affects you most. The Attorney General brings the public-nuisance count both for the state and "as parens patriae on behalf of individuals residing in Utah", which means on behalf of residents. A request is not a recovery, though. Restitution would only come after Utah wins, and the complaint does not say how money would reach individual users.

Does this affect sweepstakes casinos in Utah?

The complaint never mentions sweepstakes casinos. The legal tools it uses, however, are not specific to prediction markets. Count I uses the Attorney General's power under Utah Code section 78B-6a-102 to bring a public-nuisance action. That power applies whenever there is "substantial ongoing harm to a significant number of the citizens of Utah". The gambling sections the complaint relies on are in the same part of the code that defines "sweepstakes" and "fringe gambling". The definition of fringe gambling covers "any de facto form of gambling". We are not predicting an action against any sweepstakes operator. The point is that Utah now has a template for this kind of suit, and our Utah state page already treats the state as the most hostile in the country short of a ban.

A correction to our own site. Our Utah page says HB 243 "stalled in Senate Rules on February 11" and would have written sweepstakes casinos into the code as fringe gambling. Both claims are wrong, according to the legislature's own record. HB 243 passed the Senate 25-0 on February 27, and Governor Cox signed it on March 25, 2026. The amended section 76-9-1401 took effect on May 6, 2026. The bill's long title describes it as one that "clarifies that a proposition bet falls within the definition of gambling". The fringe-gambling definition in the amended section still does not mention sweepstakes. We have flagged the state page for correction. For how the free-entry model holds up in strict states generally, see our guide to whether sweepstakes casinos are legal.

How does this fit the wider fight over prediction markets?

States are now going after these companies in their own courts as well as defending themselves in federal ones. Connecticut's attorney general sued Kalshi in Hartford in August to get its state revenue back. Missouri sent cease-and-desist letters to six prediction markets, and Polymarket sued Ohio while Novig sued Missouri. At the federal level, the CFTC's October rule excludes state-licensed gambling from the swap definition, but it does not settle whether states can enforce against event contracts. Our state-by-state matrix tracks where sweepstakes brands themselves operate. That is a separate question from where a prediction market says it is allowed to operate.

Sources & documents

• Verified Complaint and Jury Demand, Brown v. Kalshi Inc. et al., Third Judicial District Court, Salt Lake County (PDF, copy published by InGame), for the defendants, counts, estimates and prayer for relief
• InGame report on the filing, October 20, 2026
• KUER: Utah sues prediction market site Kalshi, for Kalshi's statement and its position on the federal appeal
• Salt Lake Tribune report and KSL report, confirming the 3rd District Court filing
• Utah Code section 76-9-1401, current version effective May 6, 2026
• HB 243 (2026), Gambling Revisions: bill page, status record and enrolled text

21+ only. Prediction markets and sweepstakes play are not a way to make money. If gambling stops being fun, call 1-800-GAMBLER or visit our responsible gaming resources.