TLDR
- The CFTC sued Utah and Attorney General Derek Brown on Monday, saying the state is intruding on federal authority over prediction markets.
- Utah had filed a lawsuit against Kalshi, seeking to recover up to $60 million in profits tied to event contracts.
- This is the CFTC’s tenth lawsuit against a state over its claimed “exclusive jurisdiction.”
- Reuters reported the CFTC is investigating whether Polymarket broke a 2022 deal to block U.S. users.
- New Jersey asked the Supreme Court to weigh in on its case against Kalshi, and the court has not said if it will hear it.
The US Commodity Futures Trading Commission (CFTC) has filed a lawsuit against the State of Utah and its Attorney General Derek Brown. The case was filed in the US District Court for the District of Utah, Central Division.
LATEST: ⚖️ The CFTC and DOJ sued Utah in federal court, arguing the Commodity Exchange Act overrides state gambling laws for CFTC-regulated prediction markets like Kalshi. pic.twitter.com/L5DZOBLvF4
— CoinMarketCap (@CoinMarketCap) October 28, 2026
The suit came about a week after Utah announced legal action against prediction market platform Kalshi and its affiliates. Utah says Kalshi offered illegal betting to residents.
The CFTC argues Utah is trying to get around federal law. It says the state is restricting the work of CFTC-registered exchanges.
The filing says the event contracts Utah is targeting are “swaps” under the federal Commodity Exchange Act. It also says the exchanges that offer them are CFTC-regulated Designated Contract Markets.
CFTC Chair Michael Selig said Congress gave the agency sole responsibility to oversee these markets. He said the CFTC will defend its exclusive jurisdiction over commodity derivatives.
Utah’s Case Against Kalshi
Utah’s lawsuit seeks to recover up to $60 million in profits that it says Kalshi obtained illegally. The state called the platform a “public nuisance” that is causing ongoing harm to residents.
Utah says Kalshi violated its gambling laws. That includes betting on sports, elections and politics.
A Kalshi spokesperson, Jacki McGavick, responded to the Utah case. She said Kalshi answers to federal law as a national derivatives market overseen by the CFTC. She added that no single state should have a veto over it.
The Utah Attorney General’s office did not immediately respond to a request for comment.
A Tenth State Lawsuit
The Utah case is the tenth lawsuit the CFTC has brought against a state. The others were against Arizona, Connecticut, Illinois, New York, Wisconsin, Minnesota, Rhode Island, New Mexico and Kentucky.
Under the Trump administration, Selig has pushed the agency’s oversight through lawsuits and rulemaking. States have pushed back. They say they have authority over sports betting and that some platforms operate illegally and avoid paying taxes.
The question of who has jurisdiction has moved through state courts. It may end up at the Supreme Court.
In September, New Jersey officials asked the high court to review their case against Kalshi. Similar cases are pending in Michigan, Ohio, Kentucky, Nevada, Massachusetts, Wisconsin and New York.
As of Tuesday, the Supreme Court has not said whether it will hear the case.
Also on Tuesday, Reuters reported that the CFTC is investigating Polymarket. The probe is looking at whether the platform broke a 2022 agreement. Under that deal, made during the Biden administration, Polymarket promised to stop offering its contracts to people in the US.
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