A federal judge has granted Utah summary judgment in a dispute over Kalshi's sports event contracts, holding that the Commodity Exchange Act does not preempt the state's anti-gambling laws. The ruling, issued in the U.S. District Court for the District of Utah, clears the way for Utah to enforce its gambling prohibitions against the prediction-market platform. Kalshi said it will appeal the decision to the Tenth Circuit Court of Appeals.
Why the judge sided with Utah
The court found that the Commodity Exchange Act, which governs futures trading, does not block states from regulating contracts that involve betting on sports outcomes. Utah argued that Kalshi's event contracts—where users wager on whether a team will win or a player will score—amount to illegal gambling under state law. The judge agreed, rejecting Kalshi's claim that federal commodities law gives it blanket protection. The decision means Utah can proceed with enforcement actions against the company for offering those contracts within its borders.
Kalshi's next move
Kalshi plans to appeal the summary judgment to the Tenth Circuit. The company has maintained that its products are regulated futures contracts, not gambling, and that federal law should take precedence. If the appeal goes forward, it will bring prediction-market litigation into seven of the 13 federal circuits. That could increase the chances of a circuit split, which often prompts the U.S. Supreme Court to weigh in.
What this means for prediction markets
The ruling is a setback for Kalshi and other platforms that offer event-based contracts. While the Commodity Futures Trading Commission has allowed some prediction markets to operate under its oversight, the Utah decision shows that state gambling laws can still apply. Other states with strict anti-gambling statutes may now have a legal basis to challenge similar products. The outcome of the Tenth Circuit appeal will be closely watched by the industry and regulators alike.
Kalshi has not said when it will file the appeal, but the company is expected to move quickly. The case is one of several testing the boundaries between federal commodities regulation and state gambling laws.
