Utah has filed criminal charges against Kalshi, CEO Tarek Mansour and chief operating officer Luana Lopes Lara over alleged illegal online gambling. The move follows a civil lawsuit from the state and a federal suit from the CFTC that seeks to block Utah from enforcing its gambling laws against prediction markets.
Utah filed criminal charges against Kalshi and two of its executives for allegedly promoting illegal online gambling, escalating its legal battle with the prediction markets platform. Attorney General Derek Brown named CEO Tarek Mansour and chief operating officer Luana Lopes Lara, accusing them of letting an undercover agent place wagers.
Brown rejected the idea that the platform's label matters. According to Brown: "Calling it a 'prediction market' doesn't change what it is".
Undercover agent placed 12 sports wagers
The charges include 13 felonies and one misdemeanor, according to crypto.news. Investigators said agent Scott Eggerman placed 12 wagers on sporting events, risking a total of $114.87 and recording a net loss of $25.10.
Each of the 12 transactions forms the basis of a third-degree felony charge for online gambling promotion. The state also issued court summonses to Mansour and Lopes Lara instead of seeking arrest warrants.
Kalshi, however, rejected the prosecution and said it expected to defeat the charges in court. The company argues that its event contracts qualify as federally regulated derivatives, crypto.news reported.
Charges follow a civil suit and a federal challenge
The criminal case comes after Brown sued Kalshi and two Susquehanna trading firms last week, accusing them of running an illegal gambling business in the state. In that civil case, Utah seeks between $30.6 million and $61.2 million in allegedly unlawful trading fees, according to crypto.news.
Meanwhile, the Commodity Futures Trading Commission (CFTC) sued Utah on Tuesday, arguing that the state was intruding on its jurisdiction over prediction markets. The agency has sued at least 10 states, including Utah.
Kalshi also sued Utah in February, but a judge denied its request for a federal order, ruling that the federal law Kalshi cited did not prevent Utah from enforcing its laws.
The Block has reached out to Kalshi for comment.
Sources: The Block, crypto.news
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