Utah Sues Kalshi and Susquehanna Firms to Halt Alleged Illegal Betting

Utah Attorney General Derek Brown is suing Kalshi and two Susquehanna entities to stop alleged illegal online gambling and recover profits, extending the state’s enforcement fight beyond the exchange to firms that supply its trading liquidity.

The complaint, in Utah’s Third Judicial District Court in Salt Lake County, seeks preliminary and permanent injunctions against sports, election, politics, culture and “mentions” contracts. It also asks for restitution, damages and disgorgement of money received from conduct in Utah or directed at people there.

For Utah traders, the requested restrictions would cut off those markets through a court-approved third-party geolocation provider. The state alleges Kalshi continued offering wagers after a federal judge rejected its argument that federal commodities law shields its sports contracts from Utah’s gambling prohibitions.

The defendants include Kalshi Inc., KalshiEX LLC, Kalshi Klear Inc., Kalshi Klear LLC and Kalshi Trading LLC, alongside Susquehanna International Group LLP and Susquehanna Government Products LLLP.

Utah alleges the Susquehanna firms act as institutional counterparties, routinely taking the other side of retail customers’ wagers, including those placed by Utah residents. The complaint characterizes that activity as accepting and profiting from illegal bets. Its claims include public nuisance, unjust enrichment and civil conspiracy, alongside requests for declaratory and injunctive relief. It also seeks punitive damages and reimbursement of the state’s nuisance-abatement costs.

The market-making relationship itself was publicly announced by Kalshi in April 2024. That release identified Susquehanna Government Products as a dedicated institutional market maker providing liquidity to the exchange.

Citing testimony by Kalshi’s head of markets in the earlier federal case, the new complaint says 55,819 accounts had registered with Utah addresses as of Feb. 25, 2026. Of those, 32,940 had completed sign-up, including identity verification. Those figures describe accounts at that date, rather than a current tally of active traders.

Federal Protection Denied

The enforcement action follows an Aug. 4 ruling by U.S. District Judge Robert J. Shelby granting summary judgment to Utah officials and denying Kalshi a preliminary injunction. Kalshi had argued that the Commodity Exchange Act preempted state restrictions on its federally regulated exchange. Shelby concluded the federal law did not preempt Utah’s ability to enforce its anti-gambling laws.

That position is not uniform across courts. As The Defiant previously reported, an Illinois federal judge on Oct. 2 granted partial preliminary-injunction requests by Kalshi, Coinbase and the Commodity Futures Trading Commission, finding that state licensing requirements likely conflicted with federal law governing certain sports contracts.

Kalshi appealed its Utah defeat. A subsequent order from Shelby records that the Tenth Circuit denied Kalshi’s request for an injunction pending appeal on Sept. 8. On Oct. 14, Shelby denied the parallel request before his own court as moot because the appeals court had already denied the same relief.