Case 2:26-cv-00151 Document 1 Filed 02/23/26 PageID.2 Page 2 of 27
INTRODUCTION
1. This action challenges the State of Utah’s intrusion into the federal government’s
exclusive authority to regulate derivatives trading on exchanges overseen by the Commodity Futures Trading Commission (“CFTC”). 7 U.S.C. § 2(a)(1)(A). Plaintiff KalshiEX LLC (“Kalshi” or “Plaintiff”) believes the Governor of Utah (the “Governor”) and the Attorney General’s Office of Utah (the “Utah AG”) will imminently bring an enforcement action against Kalshi with the intent to prevent Kalshi from offering event contracts for trading on its federally regulated exchange. Defendants have repeatedly represented that they believe Kalshi is operating unlawfully under Utah anti-gambling laws—just last week the Governor said “I think you’re going to see 50 states suing these guys in one way or another” and that businesses like Kalshi are “illegal in Utah and will continue to be so.” 1 Yesterday, Attorney General Brown published an op-ed, which referenced Kalshi by name, made clear that Attorney General Brown considers trading event contracts to be illegal in Utah, and stated he has a plan to address prediction markets operating in the state. 2 And when Kalshi’s counsel made multiple attempts to contact the Utah AG to inquire as to whether Utah was preparing to take action against Kalshi, it was met with silence, even though the Utah AG had previously been willing to communicate with counsel. 2. 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
1 Raga Justin, Connecticut Gov. Lamont Pushes for Limits on Prediction Markets , Bloomberg Law (Feb. 20, 2026, 3:10 PM EST), https://news.bloombergtax.com/daily-tax-report-state/connecticut-gov-lamont- pushes-for-limits-on-prediction-markets. 2 Derek Brown, Opinion: Utah’s attorney general takes a stand against gambling and prediction markets , Desert News (Feb. 22, 2026), https://www.deseret.com/opinion/2026/02/22/utah-gambling-apps- prediciton-markets-harmful-dangerous/.
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