Utah is moving to restrict prediction markets such as Kalshi and Polymarket through new legislation targeting sports proposition betting, opening a legal dispute with the Commodity Futures Trading Commission over whether the platforms fall under state gambling law or federal financial regulation.
The legislation would broaden Utah’s gambling prohibition to include wagers tied to events that occur during a sporting contest rather than solely the final outcome. These wagers, often referred to as prop bets, can involve predictions about a player’s performance or whether a team reaches certain statistical totals, such as rebounds.
Governor Spencer Cox said he plans to sign the bill.
“We are putting a casino in the pocket of every single American, and they are targeting especially young people,” Cox said. “It is really awful what they are doing, and we are going to make sure this doesn’t happen in our state.”
Federal authority challenged in court
Kalshi filed a lawsuit against Utah in late February seeking to prevent the state from enforcing gambling restrictions against the platform. The company has support from the Commodity Futures Trading Commission, which oversees derivatives markets in the United States.
The CFTC maintains that prediction markets fall under federal financial regulation. According to the agency, states cannot prohibit the platforms simply due to moral opposition.
“To those who seek to challenge our authority in this space, let me be clear: We will see you in court,” said CFTC Chairman Michael Selig in a video posted on social media last month.
Early court rulings in several states have produced mixed outcomes. Judges in Nevada and Massachusetts issued decisions allowing states to restrict Kalshi and Polymarket from offering sports betting markets. Courts in New Jersey and Tennessee issued rulings in favor of Kalshi.
“What’s at stake here is whether states will be able to regulate gambling or if gambling is going to be subsumed into finance and ultimately regulated by Congress,” Todd Phillips, a professor at Georgia State University, told the Associated Press.
“The line between gambling and finance is very, very fine,” Phillips said. “There’s a reason why Congress has, over and over again, stepped in to define and regulate financial markets when the products skew too close to gambling.”
Sports trading volume draws attention
Prediction market platforms allow participants to buy and sell contracts tied to the likelihood that an event will occur. Contracts are typically priced between $0.01 and $0.99, a range that roughly corresponds to the probability traders assign to an outcome.
Companies such as Kalshi say these products serve risk management functions similar to commodity futures contracts used by agricultural producers. Derivatives exchanges, including the Chicago Board of Trade and the Chicago Mercantile Exchange, have long offered binary options tied to event outcomes.
However, a significant portion of trading activity on prediction markets now relates to sports. Kalshi reported more than $1 billion in trading volume tied to the Super Bowl.
Utah’s legislation also addresses prediction market products introduced by sportsbook operators such as FanDuel and DraftKings. Analysts say these offerings could allow companies to bypass state gambling restrictions.
Kalshi argues its platform differs from sportsbook operations because participants trade contracts against one another rather than against a house operator.
Political and industry backdrop
The dispute arises during a period of growth in the prediction market sector. Kalshi and Polymarket are estimated to have valuations of about $20 billion each following their most recent fundraising rounds.
The industry also has ties in Washington. Donald Trump Jr. serves as an adviser to both companies and is an investor in Polymarket. Truth Social, associated with Donald Trump, is preparing a cryptocurrency-based prediction market called Truth Predict.
The Utah dispute represents one of the first major policy disagreements between Cox and Trump since the governor moved closer to the former president after declining to vote for him in 2016 and 2020.
Religious and cultural context
Utah has prohibited most forms of gambling since it entered the Union in 1895. Along with Hawaii, it maintains some of the strictest gambling restrictions in the country. The state does not allow casinos, racetracks with betting, or multi-state lotteries such as Powerball or Mega Millions.
These policies are closely linked to the influence of The Church of Jesus Christ of Latter-day Saints, which teaches that gambling stems from “a desire to get something for nothing.”
Original article: https://www.yogonet.com/international/news/2026/03/13/118057-utah-bill-targeting-sports-prop-bets-triggers-legal-dispute-with-prediction-markets
