Kalshi Sues Utah As Governor Vows To Fight Against Sports Prediction Markets

Utah is the latest state to take strong exception to Kalshi offering sports markets. Gov. Spencer Cox said the markets are gambling “pure and simple.” Kalshi has hit back with a lawsuit against the Governor and Attorney General Derek Brown.

Last week, Gov. Cox posted on X, “Rebranding betting as a financial product doesn’t reduce the harm it causes, especially for young men. We’re ready to defend our laws in court and protect Utahns from companies that drive addiction, isolation, and serious financial harm.”

Rebranding betting as a financial product doesn’t reduce the harm it causes, especially for young men.

We’re ready to defend our laws in court and protect Utahns from companies that drive addiction, isolation, and serious financial harm.

More here: https://t.co/3Ge0pdRJ61 pic.twitter.com/WvQz1pQgus

— Governor Cox (@GovCox) February 19, 2026

Kalshi posted a screenshot of this post in its lawsuit, along with another in which Cox vowed to “use every resource within my disposal as governor of the sovereign state of Utah, and under the Constitution of the United States” to fight against sports prediction markets in court.

The other post was Cox responding to Commodity Futures Trading Commission (CFTC) Chair Michael Selig. Selig posted a video on X saying the CFTC will defend against the “onslaught of litigation” that prediction markets are facing.

Mike, I appreciate you attempting this with a straight face, but I don’t remember the CFTC having authority over the “derivative market” of LeBron James rebounds. These prediction markets you are breathlessly defending are gambling—pure and simple. They are destroying the lives… https://t.co/Ohup2x3D8u

— Governor Cox (@GovCox) February 17, 2026

Kalshi argued these words are a threat to its legitimate business. Additionally, Attorney General Brown has been outspoken in his opposition to sports prediction markets.

He stated, “You can’t bet that the Seahawks were going to win (the Super Bowl), but you could trade on a potential future outcome in which the Seahawks would win. Now, if that sounds like a distinction without a difference, it absolutely is, in my mind, and it is gambling.”

In its lawsuit against Cox, Brown, and others in the Attorney General’s office, Kalshi stated, “Utah’s stated intent to prohibit Kalshi from operating is a form of regulation that intrudes upon the federal regulatory framework that Congress established for regulating derivatives on designated exchanges.

“The state’s efforts to regulate Kalshi are preempted under principles of express preemption, field preemption, and conflict preemption. This Court should therefore issue both a preliminary and a permanent injunction, as well as grant declaratory relief.”

Utah’s lawmakers are meanwhile advancing legislation that proposes explicitly prohibiting all proposition betting. Cox referenced that he believes a derivative market on LeBron James’ rebounds is gambling, and HB243 would attempt to formally classify this as gambling. Kalshi would undoubtedly argue that even if it passes, it would not override federal law, which permits such markets.

Kalshi Emboldened By Tennessee Ruling

The fight between state regulators and Kalshi shows no signs of abating. Kalshi suffered a setback in Massachusetts when a judge granted an injunction against the company. However, an appeals court granted Kalshi’s motion to stay pending a more definitive ruling. That means the platform can continue operating in Massachusetts, for now.

To date, no state has successfully been able to force Kalshi to withdraw. This week, a judge in Tennessee gave the company a further boost by granting an injunction to prevent the state from enforcing a cease-and-desist order issued last month.

Kalshi quickly moved to file this ruling in a court case against Connecticut’s authorities. It also referenced an amicus brief filed by the CFTC in a legal battle in Nevada.

Selig drove forward this brief, which attempts to reaffirm the CFTC’s exclusive jurisdiction over prediction markets. When taking up his role as CFTC chair, Selig had said that he would allow the courts to decide on whether prediction markets are legal, but he has become increasingly active in joining the legal battles against states on behalf of platforms such as Kalshi, Polymarket, and others.