The CFTC sued Utah to stop it shutting down Kalshi. It is the agency’s tenth lawsuit against a state, and the first against one with a Republican governor

Analysis · Updated October 28, 2026 · 18+ · Not legal advice · By BetG8 Editorial · Prediction Markets

CFTC sues Utah over prediction market enforcement, its tenth suit against a state — Six days after Utah sued Kalshi in state court, the federal regulator sued Utah in federal court.

Short answer: On Monday, October 26, the United States and the Commodity Futures Trading Commission sued the State of Utah and Attorney General Derek Brown in the U.S. District Court for the District of Utah. The complaint has one claim, under the Supremacy Clause: that the event contracts Utah is pursuing are swaps traded on CFTC-designated exchanges, so Utah’s gambling and public nuisance laws are preempted as applied to them. It asks for a declaration and for preliminary and permanent injunctions barring Utah from investigating or enforcing against CFTC-regulated exchanges and their partners. The suit answers the case Brown filed in Salt Lake County on October 20 against Kalshi and its market maker Susquehanna, which estimates Kalshi earned $30.59 million to $61.18 million in fees from Utah accounts. It is the CFTC’s tenth suit against a state and its first against a state led by a Republican governor. No court has ruled, and Kalshi remains available in Utah.

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Utah is the state where the federal preemption argument has already lost once. In August a federal judge in Salt Lake City gave the state summary judgment in the case Kalshi brought against it, and in September the Tenth Circuit refused to block enforcement while Kalshi appeals. Utah then went on the offensive in its own courts. Monday’s filing puts the federal government, rather than the company, on the other side of the same question in the same courthouse.

What the CFTC filed

The plaintiffs are the United States and the CFTC; the defendants are the State of Utah and Attorney General Brown. Kalshi is not a party. The complaint, filed in the Central Division of the District of Utah, argues that the contracts Utah has targeted are swaps under the Commodity Exchange Act, that Congress gave the CFTC exclusive jurisdiction over swaps traded on designated contract markets, and that Utah’s gambling statutes and public nuisance law are therefore preempted on express, field and conflict grounds. It says Utah’s effort “threatens to wipe out the operation of CFTC-regulated exchanges within the State” and that the injury “is irreparable.”

The relief sought is broad. Beyond a declaration, the CFTC asks the court to stop Utah and its officials from investigating CFTC-regulated entities, their affiliates and their partners, or enforcing state law against transactions on their platforms. That reaches past Kalshi to any designated exchange, including Polymarket US, and to the firms that clear, make markets in or distribute their contracts.

CFTC Chairman Michael Selig said “Utah seeks to shut down prediction markets across a wide variety of markets” and that “Congress entrusted the CFTC to be the federal regulator with sole responsibility to oversee these markets.” Kalshi spokesperson Jacki McGavick told Politico that Kalshi “answers to federal law, and no single state should have a veto over it.” Brown’s office said it had no comment because the matter is ongoing.

How Utah got here

Date	Event
Sept 2024	Kalshi begins offering contracts to Utah residents, according to the state’s complaint
Feb 2026	Kalshi sues Governor Spencer Cox and other officials pre-emptively in federal court
Aug 4, 2026	Judge Robert Shelby grants Utah summary judgment: the Commodity Exchange Act does not preempt Utah’s gambling laws
Sept 8, 2026	The Tenth Circuit denies Kalshi’s request to block enforcement pending appeal, according to the attorney general’s office
Oct 20, 2026	Brown sues five Kalshi entities and two Susquehanna entities in Third District Court, Salt Lake County
Oct 26, 2026	The United States and the CFTC sue Utah and Brown in federal court

The numbers in Utah’s own case

The state suit is what the CFTC is reacting to, and its figures explain why. According to Sports Betting Dime’s reading of the filing, Kalshi had 55,819 accounts registered with Utah addresses by February 2026, 32,940 of them fully signed up, more than five million wagers, and about $5 million in open positions on February 25. Utah’s counsel estimates that Utah accounts had made more than 3,059,160,000 event contract trades by October 19, and Brown puts Kalshi’s fees from them at between $30.59 million and $61.18 million.

Those two fee figures are the trade count multiplied by one cent and by two cents. That is a rough bracket rather than an audited number: Kalshi’s taker fee is 0.07 times price times one minus price, rounded up, which works out to between one and two cents a contract for most of the price range, and less near the extremes. The state is not asking the court for that amount as such; it seeks an end to the markets, return of profits, restitution and an accounting under public nuisance law. Naming Susquehanna, Kalshi’s main market maker, is the part that sets Utah’s case apart from most state actions, and it is one reason the CFTC’s requested injunction covers partners and affiliates and not only exchanges.

Ten suits, one argument

The complaint lists the nine states the CFTC had already sued over prediction markets: Arizona, Connecticut, Illinois, Kentucky, Minnesota, New Mexico, New York, Rhode Island and Wisconsin. Selig announced the first three on April 2. Politico reports that Utah is the first state with a Republican governor on the list, which turns what had looked like a fight between a Republican administration’s regulator and Democratic-led states into something less partisan. Utah’s governor, Spencer Cox, called the idea of the CFTC regulating these platforms “a joke” earlier this year, and Utah is one of only two states with no legal gambling of any kind.

The legal theory is the one the CFTC has run everywhere: sports and other event contracts on a designated contract market are swaps, and swaps are federal. It has not yet won that argument on appeal. The Third Circuit ruled for Kalshi against New Jersey in April, but the Ninth Circuit ruled for Nevada on August 28 and the Sixth Circuit for Ohio and Tennessee on September 25. New Jersey’s petition asking the Supreme Court to settle the split, No. 26-299, is waiting on Kalshi’s response, due November 9. Separately, comments on the CFTC’s two swap-definition rules close on November 18.

What changes, and what does not

Nothing changes for a Utah resident today. No court has ruled on the CFTC’s claim or on Brown’s, Kalshi has not geofenced Utah, and no order requires it to. What has changed is the shape of the fight. Utah now holds a final federal judgment against Kalshi on preemption, is pursuing Kalshi and Susquehanna in state court, and is defending a second federal suit in which the plaintiff is the United States. The CFTC’s suit can only bind the parties to it, and Judge Shelby’s August ruling, which reached the opposite conclusion on the same statute, stands unless the Tenth Circuit reverses it.

The election angle is narrower than it looks. Utah’s complaint covers contracts on sports, elections and politics as well as other events, and the midterms are six days away. Political contracts continue to trade nationally; our live midterm odds page compares Kalshi and Polymarket prices on the House, the Senate and the key races.

What to watch

Three things. Whether the CFTC moves for a preliminary injunction quickly, and whether the case is assigned to Judge Shelby, who has already ruled against the preemption theory. Whether Kalshi tries to move Brown’s state case into federal court, the route other defendants have taken in Kentucky and elsewhere. And whether the Tenth Circuit schedules argument in Kalshi’s appeal, which would give the first appellate answer in a circuit covering six states. Every dated step will go into our change log.

Method and limits

We have not read the CFTC complaint or the state complaint in full. Claims, relief and quotations are from RG.org and Sports Betting Dime, which reviewed the filings, and from Politico’s reporting; account and trade figures are Utah’s allegations, not findings. The Tenth Circuit stay denial is as reported by the Utah attorney general’s office. The one-cent and two-cent reading of the fee bracket is our arithmetic. Kalshi’s availability in Utah is from our tracker as of October 28, 2026. Nothing here is legal, financial or betting advice.

Frequently asked questions

Why did the CFTC sue Utah?

To stop Utah applying its gambling and public nuisance laws to event contracts traded on CFTC-regulated exchanges. The October 26, 2026 complaint argues those contracts are swaps under exclusive federal jurisdiction, and it followed Utah’s October 20 state-court suit against Kalshi and Susquehanna.

How many states has the CFTC sued over prediction markets?

Ten. Before Utah it had sued Arizona, Connecticut, Illinois, Kentucky, Minnesota, New Mexico, New York, Rhode Island and Wisconsin. Utah is the first with a Republican governor.

Is Kalshi still available in Utah?

Yes, as of October 28, 2026. Utah won a final judgment in August that its laws apply to Kalshi and is suing it in state court, but no court has ordered Kalshi to geofence the state.

How much money is Utah asking Kalshi for?

Utah seeks an end to the markets, return of profits, restitution and an accounting. The attorney general estimates Kalshi’s fees from Utah accounts at $30.59 million to $61.18 million, which is a fee estimate rather than a specific damages demand.