A federal judge handed Utah a major victory over Kalshi earlier this week, ruling that federal commodities oversight does not prevent the state from enforcing its anti-gambling laws against prediction markets.

Utah Defends Its State Gambling Authority

On Tuesday, U.S. District Judge Robert Shelby granted Utah summary judgment, rejecting Kalshi’s claim that the Commodity Exchange Act gives the Commodity Futures Trading Commission exclusive control over its event contracts. He concluded the law "does not preempt Utah’s enforcement of its anti-gambling laws against Kalshi."

Utah Attorney General Derek Brown said his office would enforce the ban. "Gambling is gambling, no matter what any company calls it," Brown said. Gov. Spencer Cox (R) said the platforms were "causing tremendous harm to countless American families."

Kalshi, which sued Utah in February, said it disagreed and would appeal. Utah residents could still access the platforms. The state’s new law expressly classifies sports proposition bets, or wagers on events within a game rather than solely the result, as illegal gambling.

Benzinga reached out to Kalshi for additional comment but did not receive an immediate response.

Courts Split Over Prediction Market Oversight

The decision deepens a national court split. Kalshi secured a 2-1 federal appeals court victory blocking New Jersey’s gambling laws, while another judge recently halted Minnesota’s first statewide prediction-market ban. Courts in Nevada, Maryland, Ohio, New York and Wisconsin have ruled against Kalshi in related cases.

The CFTC maintains that federally regulated prediction markets may operate nationwide. Chairman Michael Selig has said, "States cannot circumvent the clear directive of Congress," and the agency has sued several states to shield Kalshi, Polymarket and other registered platforms from local restrictions. President Donald Trump has backed that position.

Sports Trading Raises Political Stakes Nationwide

Sports trading has raised the financial stakes. The Associated Press notes that sports generate most of Kalshi’s volume and roughly half of Polymarket’s, while Kalshi recorded more than $1 billion in Super Bowl trading. Reuters reported that Kalshi handled $27 billion during the 2026 World Cup and drew about 3 million users.

The Trump administration backs exclusive federal oversight. Donald Trump Jr. advises both Kalshi and Polymarket and invested in Polymarket through 1789 Capital, while Trump Media plans to launch Truth Predict through Truth Social. Utah’s ruling gives states fresh ammunition against that federal push.

Disclaimer: Kalshi and Benzinga have an existing data collaboration agreement.

Image via Shutterstock