The US state of Utah is moving to block prediction market platforms such as Kalshi and Polymarket, intensifying an ongoing dispute between state regulators and federal authorities over how the sector should be regulated.
On Wednesday, the state’s HB243 (Gambling Revisions) bill was sent to the governor’s desk after passing the Utah House of Representatives on Feb. 10 and clearing the Utah Senate on Feb. 27. The legislation classifies “proposition betting” as gambling. These bets typically involve wagers on specific in-game events — such as an individual athlete’s performance or whether a team reaches a particular statistic — rather than the final result of a match.
The bill aims to prevent companies from offering sports-related prediction or proposition betting within Utah, including platforms that describe themselves as prediction markets rather than traditional sportsbooks.
Spencer Cox, the state’s governor, said he intends to sign the legislation, according to a report from Associated Press on Thursday. Cox criticized the rapid growth of digital betting platforms, saying they effectively place “a casino in the pocket of every single American,” while particularly targeting younger users.
Kalshi challenges Utah in court
In response to the legislation, Kalshi filed a lawsuit against Utah in February, asking a federal judge to block the state from enforcing gambling restrictions against its platform after the Utah Senate Business and Labor Committee unanimously approved the bill.
Kalshi maintains that its event-based contracts are federally regulated financial derivatives rather than gambling products. The company argues that oversight of these markets falls under the exclusive authority of the Commodity Futures Trading Commission through the Commodity Exchange Act, meaning individual states should not have the power to ban them.
On Wednesday, Kalshi also filed a lawsuit against the US state of Iowa, arguing the action was necessary due to the risk of an imminent enforcement move by state authorities. The filing follows a ruling earlier in the week in which a federal judge in Ohio denied Kalshi’s request to block regulators from applying state gambling laws to its sports event contracts.
CFTC asserts authority over prediction markets
The Commodity Futures Trading Commission has maintained that it holds regulatory oversight of prediction markets. Its chairman, Michael Selig, recently warned that the agency would defend its authority against legal challenges.
“To those who seek to challenge our authority in this space, let me be clear, we will see you in court,” Selig said.
Speaking at an industry conference in Florida on Monday, Selig also argued that prediction markets can play a valuable role in forecasting future events. He described well-functioning markets as “truth machines,” suggesting that when participants stake money on their expectations, the resulting signals can be more transparent and potentially more reliable than traditional opinion polls.
