Kalshi has filed a lawsuit against Utah in its latest attempt to block a state from shutting down its platform.
In a 33-page filing submitted Monday, Kalshi asked a federal judge to issue an injunction to prevent Utah authorities from shuttering its platform statewide. Utah is the first state without legal sports wagering to be sued by Kalshi, the most prominent of US prediction markets. The state argues Kalshi is operating illegally under its anti-gambling laws.
In the suit, which names Utah Governor Spencer Cox and Attorney General Derek Brown, Kalshi seeks an emergency temporary restraining order against the state. Utah, which has historically maintained one of the nation’s most vigorous anti-gambling policies, is the latest state to clash with the US Commodity Futures Trading Commission over sports event contracts.
On 17 February, Cox responded on X to a video posted by CFTC Chair Michael Selig, who criticised a state-led push to challenge the legality of sports event contracts in court. The Utah governor questioned whether sports event contracts meet the legal definition of a swap that is proper for prediction markets:
“Mike, I don’t remember the CFTC having authority over the ‘derivative market’ of LeBron James rebounds,” Cox wrote.
“Let me be clear, I will use every resource within my disposal … and under the Constitution of the United States to beat you in court,” the governor said.
Attorneys for Kalshi say that Utah intends to brings an enforcement against Kalshi unless the company stops offering the contracts. The derivatives, they claim, are offered on a federally regulated exchange without objection from the CFTC.
“In doing so, defendants would seek to subject Kalshi to the patchwork of state regulation that Congress created the CFTC to prevent, and defendants would interfere with the CFTC’s exclusive authority to regulate derivatives trading on the exchanges it oversees,” the company said in its filing.
Who cashed in on length of Trump SOTU address?
When US President Donald Trump addressed the nation Tuesday in his annual State of the Union speech, the nation’s 47th president gave the longest SOTU speech in at least 60 years.
Trump’s address exceeded 1 hours and 47 minutes, topping the previous record set by Bill Clinton in 2000 by nearly 20 minutes. The unusual length provided a win for traders on Polymarket who predicted that Trump’s address would last more than 100 minutes.
Ahead of the address, Democratic Senator Chris Murphy of Connecticut posted a note regarding the contract on his X account. At 5pm ET, the option traded at a 73.5% implied probability, spiking considerably from a probability of 42% approximately 24 hours earlier. The trade consistently carried higher odds than the other options (60-70 minutes, 70-80 minutes and under 60 minutes).
Murphy suggested on X that the market could be susceptible to manipulation, writing: “This is not the outcome of a game, this is a question with an answer that already exists.”
Among traders who predicted that the address would go over 100 minutes, only four shareholders held more than 3,000 shares, according to Polymarket’s order book.
Last month, US Rep Ritchie Torres of New York introduced the Public Integrity in Financial Prediction Markets Act, a proposed law triggered by the ouster of Venezuela President Nicolas Maduro. The bill would make it unlawful for certain federal officials to engage in a prediction market transaction if they possess inside information.
Trump urged Congress on Tuesday to pass the Stop Insider Trading Act, a bill that would prevent lawmakers from purchasing publicly traded stocks. Trump’s comments on insider trading drew a standing ovation from Senator Elizabeth Warren, a Massachusetts Democrat widely regarded as one of his most strident critics.
Kalshi bans two over insider trading allegations
Shortly after Trump concluded his address, Kalshi announced the suspension of two customers for purported insider trading violations.
One customer, former California gubernatorial candidate Kyle Langford, placed two trades on himself to win the hotly contested race, Kalshi’s disciplinary committee found. Langford, a Los Angeles-area construction manager, made the trades on 24 May 2025, according to the committee. Langford qualified as a “direct decision maker” for the contract and had influence on the outcome of the underlying event, Kalshi wrote in a regulatory filing with the CFTC.
Langford, who had extremely slim odds to become governor, later promoted his trades on social media. In a call with Kalshi’s compliance department, Langford acknowledged that the trades were in violation of Kalshi’s rules. Kalshi imposed a $2,246.36 penalty against Langford and suspended him from the exchange for five years.
The other suspension involved an editor for MrBeast, a popular YouTube channel. The committee found that editor Artem Kaptur traded on material non-public information he obtained through his employment.
Kaptur, according to regulatory filings, placed about $4,000 on trades regarding content that appeared on the streaming site. While users traded hundreds of thousands of dollars on what will be said on his site, Kaptur recorded a “near-perfect record” on the trades, the committee found. Kalshi suspended Kaptur for two years.
“We’re committed to finding the bad actors, manipulators and those who willingly cheat,” said Robert DeNault, head of enforcement at Kalshi.
The suspensions are the first for insider trading that have been publicly disclosed by Kalshi.
Rumours swirl of prediction market interest by Fanatics
Fanatics continues to deal with the fallout from the departure of a high-ranking official who left for Polymarket last month.
Early this year, former Fanatics executive Ari Borod joined Polymarket as its president of sports business development. Fanatics initially filed a lawsuit against Borod blocking him from joining Polymarket, a dispute eventually settled out of court. Borod’s new position and the Florida lawsuit were covered in a 20 February story from Front Office Sports, which broke the news of his departure.
The 66-page suit also included colour on Fanatics’ prediction market planning dating to last May, when the company began to explore an entry into the new industry. One item of note surrounds Borod’s discussion of Fanatics’ interest in potentially acquiring a prediction market exchange. At one point, attorneys for Borod wrote that the executive had “minimal involvement” in Fanatics’ purported negotiations with a target exchange.
Since numerous sportsbook operators have taken rapid steps to enter prediction markets, it should not come as a surprise that Fanatics may be exploring steps to acquire an exchange. At the moment, the CFTC lists about two dozen exchanges that have achieved “designated” status.
A Fanatics spokesman declined comment on the company’s possible entry into the sector.
Matt Rybaltowski
Matt is primarily responsible for long-form feature coverage on complex sports betting scandals. He also provides coverage on finance, M&A and other technological developments.
Original article: https://igamingbusiness.com/prediction-markets/prediction-market-roundup-kalshi-sues-utah/
