Utah sues Kalshi, and for the first time its market maker too: the state wants up to $61.2 million in fees and a court-ordered geofence
What the complaint asks for
The relief is broader than the money. The state wants a declaration that Kalshi's contracts are gambling under Utah law, an order ending the sale of five categories of contract to people located in the state, and a geolocation block run by a provider the court approves rather than one Kalshi picks. It asks for disgorgement of profits, restitution for Utah users, damages, and abatement of what Brown called a public nuisance "causing a significant and substantial ongoing harm to a significant number of Utahns." The state is not seeking criminal charges; Arizona remains the only state with a criminal case, and that case is enjoined.
The defendants are KalshiEX LLC, the designated contract market; Kalshi Trading, which the complaint describes as the exchange's market-making arm acting "like a traditional sportsbook"; Kalshi Klear, the clearing entity; the parent company; and Susquehanna International Group and Susquehanna Government Products. The complaint's language for the exchange is not neutral. It says KalshiEX takes a "rake" and participates "in the same way the manager of a back-alley gambling den" does, and that the contracts are "indistinguishable from the format of bets offered through any sportsbook." It also alleges that Kalshi advertised itself as "legal in all 50 states," including in Utah, and that a company representative filmed an advertisement on the Brigham Young University campus.
| Figure in the complaint | Value | Basis |
|---|---|---|
| Registered accounts with a Utah address | 55,819 | Kalshi's own February 25, 2026 federal filing |
| Accounts eligible to trade | 32,940 | Same filing; the state says the number has grown since |
| Utah share of Kalshi activity | 1.1% | Share of open interest ($451.29 million at the time) in the February filing |
| Contracts traded from Utah accounts | 3,059,160,000 | 1.1% of Kalshi's contract volume to October 19, 2026, counting each contract as a wager |
| Fees Kalshi collected from Utah | $30,591,600 to $61,183,200 | Assumes $0.01 to $0.02 per contract |
| Money lost by Utah users | About $5.5 million | Utah's share of reported nationwide retail losses |
| Open positions held by Utah accounts | More than $5 million | February filing |
How the $61 million was built, and why the real number is probably lower
The fee estimate rests on two inputs and one assumption. The inputs are Kalshi's own disclosure, in the federal case, that Utah-address accounts held about 1.1 percent of its open interest, and the exchange's lifetime contract volume, which the state put at more than 3 billion Utah-linked contracts by October 19. The assumption is that Kalshi earned one to two cents on each of them. That is where the range comes from: 3,059,160,000 contracts times $0.01 is $30.6 million, and times $0.02 is $61.2 million.
Kalshi's published fee schedule does not charge a flat cent or two. For a taker, the fee is 0.07 times the number of contracts times the price times one minus the price, rounded up. At a 50-cent price that is 1.75 cents per contract, the maximum; at 90 cents it is 0.63 cents; at 5 cents it is 0.33 cents. Makers, the traders whose resting orders get filled, pay nothing on most series, and some series carry a zero taker multiplier as well. InGame, which read the complaint, put the practical range at $0.0007 to $0.0175 per contract and the lifetime average near $0.0075, which would make the state's volume estimate worth about $22.7 million rather than $30 million to $61 million. None of these figures has been tested in court. The state's number is a pleading, InGame's is a back-of-envelope calculation, and the actual revenue would come out in discovery if the case reaches it. Our fee guide works through the formula with examples.
Why Susquehanna is in the caption
Every state suit until now has named the exchange, and sometimes the brokers that distribute it: Baltimore added Robinhood, Webull and Coinbase to its August complaint, and Kentucky and New York went after Polymarket US as well as Kalshi. Utah is the first to name the firm on the other side of the trade. Its theory is simple: a market maker that quotes both sides of a sports contract and holds the position when a retail customer buys it is receiving money when that customer loses, which is what a sportsbook does. The complaint describes Susquehanna International Group and Susquehanna Government Products as functioning as market makers on Kalshi and calls Susquehanna "one of the largest market makers on Kalshi." It gives no volume share for the firm, and the state has not said why these two entities rather than others.
The firm's role is not in dispute. Kalshi chief executive Tarek Mansour announced Susquehanna's arrival on LinkedIn roughly two years ago as "the first time in prediction markets history that a prestigious Wall St institution commits to the asset class," citing the firm's roughly $2 trillion in annual trading volume and saying its presence let users trade "100,000 shares at a time (up from 1,000)." In August 2026 Susquehanna provided the liquidity and pricing behind Kalshi's block-trading arrangement with Cantor Fitzgerald. The legal question Utah has opened is whether a firm whose business is to quote prices on a federally registered exchange can be liable under state gambling law for doing so. If the answer is yes, every market maker on every designated contract market has a state-law exposure that did not exist on October 19. Susquehanna did not respond to requests for comment from SBC Americas and had not issued a statement by the time this page was published.
How Utah got here
Utah is one of two states, with Hawaii, that permit no commercial gambling at all, and it has no sportsbook, lottery or casino revenue to protect. That did not make it slow. In February 2026 the Legislature passed a bill treating prediction-market wagers as gambling, and Kalshi sued the state in federal court to stop it. On August 4, 2026 Judge Robert J. Shelby of the District of Utah denied Kalshi's injunction, granted summary judgment to the state and closed the case, holding that the Commodity Exchange Act does not preempt Utah's gambling law; it was the first final federal judgment a state had won against the exchange. Kalshi appealed to the Tenth Circuit the next day. On September 8 a Tenth Circuit panel denied Kalshi's emergency motion for an injunction pending appeal in two sentences: "Kalshi has not shown these factors weigh in its favor. Accordingly, we deny its motion." The appeal itself is still being briefed and has no argument date.
That left Utah free to enforce and, for six weeks, silent about how. Governor Spencer Cox had said businesses like Kalshi were "illegal in Utah and will continue to be so," and Brown had written in the Deseret News that he had a plan; Kalshi said its inquiries to the attorney general's office about that plan went unanswered. The complaint filed on October 20 is the plan. Brown's framing at the press conference was that the state had already won: "Kalshi bet that Utah would not enforce its gambling laws. Kalshi now lost their bet." He added, for the rest of the industry, "To every other company watching, I would ask you to do one thing: read the complaint," and that these companies "are engineered to do one thing and one thing alone, and that is to empty your wallet." Utah also signed the letter from 40 states and the District of Columbia telling the CFTC it lacks jurisdiction over sports contracts, and the Church of Jesus Christ of Latter-day Saints, whose members make up a majority of the state, had used its October general conference to call gambling morally wrong.
| Date | Event |
|---|---|
| February 2026 | Utah passes a bill treating prediction-market wagers as gambling; Kalshi sues the state in federal court |
| February 25, 2026 | Kalshi's federal filing discloses 55,819 Utah-address accounts and a 1.1% share of open interest |
| August 4, 2026 | Judge Shelby grants summary judgment to Utah; no shutdown ordered |
| August 5, 2026 | Kalshi files notice of appeal to the Tenth Circuit |
| September 8, 2026 | Tenth Circuit denies Kalshi's emergency motion for an injunction pending appeal |
| October 20, 2026 | Utah sues Kalshi entities and Susquehanna in Third District Court; seeks injunction, geofence, disgorgement and restitution |
Kalshi's answer, and what the state can and cannot get
Kalshi's statement, through spokesperson Jacki McGavick, was the one it has used in every state: "As a national derivatives market overseen by the CFTC, Kalshi answers to federal law." She added that "our customers trade with each other and set the prices" and that "no single state should have a veto over it," and said the state action "does not affect our ongoing federal litigation." The first claim is the preemption argument the Tenth Circuit has not yet decided and that Judge Shelby rejected; the second is the argument Utah is trying to answer by naming the market maker, since a customer whose counterparty is Susquehanna is not, in the state's telling, trading with another customer.
Two features of the case cut against the state's leverage. A state court cannot stop Kalshi operating nationally, and the geofence it asks for would, like Nevada's and Michigan's, remove only the five contract categories from Utah users while leaving economics, weather and finance markets alone. And the preemption question will be decided above this court: by the Tenth Circuit on the pending appeal, and potentially by the Supreme Court, which has New Jersey's petition in Flaherty v. KalshiEX, No. 26-299, before it with Kalshi's response due November 9. If the Tenth Circuit reverses Shelby, the state case loses its foundation; if it affirms, Utah will have a federal judgment, an appellate affirmance and a state-court action running at once. The money claim is the part that survives either way for longer, because disgorgement for past conduct does not depend on whether Kalshi can operate in Utah tomorrow.
What to watch
Three dates matter. The first is whatever the Third District Court sets for a preliminary injunction hearing, since a geofence order would be the first in a state with no sportsbook to protect and would be enforced by a provider the court chooses. The second is November 9, when Kalshi's brief opposing certiorari is due at the Supreme Court; a grant would freeze most state cases in practice. The third is the Tenth Circuit's own decision, for which there is no date. The signal to watch in between is whether any other state follows Utah in naming a market maker, because that is the part of this complaint that changes the risk for firms that have never been defendants before.
Method and limits
Figures from the complaint are as reported by the Deseret News, KUTV, crypto.news, Cointelegraph, InGame and SBC Americas; we have not obtained the 63-page filing itself, and the case number was not reported. The $22.7 million fee estimate is InGame's calculation using its reading of Kalshi's fee range, not ours, and the Kalshi fee formula is from the exchange's schedule effective July 7, 2026. Quotations from Brown, McGavick and Mansour are as reported by those outlets. The Tenth Circuit's September 8 order is as quoted by Yogonet and Prediction News. Whether Kalshi's contracts were available to Utah users on October 21 is based on the absence of any reported geofence; we did not test the app from Utah. Nothing on this page is legal, financial or betting advice.
Frequently asked questions
What did Utah sue Kalshi for?
On October 20, 2026 Attorney General Derek Brown filed a 63-page civil complaint in Utah's Third District Court in Salt Lake City against KalshiEX, Kalshi Trading, Kalshi Klear and Kalshi, and against Susquehanna International Group and Susquehanna Government Products. The state says the contracts are gambling under Utah law, declares the operation a public nuisance, and asks for an injunction covering sports, election, politics, culture and mention contracts, a court-approved geolocation block, disgorgement of profits and restitution. No criminal charges were filed.
How did Utah arrive at $61 million?
The complaint estimates that Utah-linked accounts traded 3,059,160,000 contracts by October 19, 2026, about 1.1 percent of Kalshi's activity, and assumes Kalshi collected one to two cents per contract. That gives a range of $30,591,600 to $61,183,200. Kalshi's published taker fee is 0.07 times price times one minus price, which peaks at 1.75 cents at a 50-cent price and is far lower near the extremes, and makers pay nothing on most series, so InGame's estimate using a lifetime average of about 0.75 cents per contract comes to roughly $22.7 million. The state separately says Utah users lost about $5.5 million.
Why is Susquehanna a defendant?
Utah alleges that Susquehanna International Group and Susquehanna Government Products act as market makers on Kalshi, taking the other side of retail trades and receiving money when customers lose, which the state says is how a sportsbook works. It is the first known state case to name a market maker alongside the exchange. Susquehanna became Kalshi's main liquidity provider about two years ago and supplied pricing for the block-trading arrangement Kalshi announced with Cantor Fitzgerald in August 2026. Susquehanna had not commented as of October 21.
Is Kalshi still available in Utah?
Yes, as of the filing. No court has ordered Kalshi to geofence Utah. A federal judge ruled on August 4, 2026 that Utah may apply its gambling law to Kalshi, and the Tenth Circuit refused on September 8 to block the state while Kalshi's appeal proceeds, but neither order required Kalshi to stop. The new state suit asks for that order. Kalshi says it answers to federal law as a CFTC-regulated exchange and that the state case does not affect its federal appeal.
Related
- Is Kalshi legal in Utah? The first final judgment
- Is Kalshi legal in your state? The 50-state tracker
- Kalshi fees explained
- Will the Supreme Court take the Kalshi case? Timeline and odds
- Sportsbook vs exchange price comparison tool
Sources
- Deseret News, Utah files lawsuit against prediction market platform Kalshi, 20 October 2026, for the court, the defendants, the relief sought, the account and loss figures and the McGavick statement.
- KUTV, Utah Attorney General declares online gambling public nuisance in lawsuit against Kalshi, 20 October 2026, for the Brown quotations and the geolocation demand.
- InGame, Utah AG sues Kalshi and market maker Susquehanna in state court, 20 October 2026, for the account counts, the contract and fee computation, the complaint's language and the $22.7 million estimate.
- SBC Americas, Kalshi suit by Utah targets a powerful new defendant, 21 October 2026, for Susquehanna's role, the Mansour quotations and the "read the complaint" remark.
- crypto.news, Utah sues Kalshi, seeks up to $61M over alleged illegal betting, 20 October 2026, for the fee range and the counterparty allegation.
- Cointelegraph, Utah officials to seek up to $60M from Kalshi in lawsuit, 20 October 2026, for the procedural history and the list of other state suits.
- Cryptopolitan, Utah sues Kalshi and Susquehanna as prediction-market scrutiny widens, 20 October 2026, for the market-maker description.
- Yogonet, 10th Circuit denies Kalshi injunction bid, clearing way for Utah enforcement, 9 September 2026, for the order's wording and the Cox and Brown statements.
- Utah Attorney General, Utah defeats Kalshi in federal court, 4 August 2026.
- Kalshi, Fee schedule, effective 7 July 2026, for the taker formula, the maker multiplier and the rounding rule.
18+ only. This page reports a court filing and public statements. It is not legal, financial or betting advice. If gambling stops being fun, help is available at 1-800-GAMBLER.