Utah files criminal gambling charges against Kalshi CEO Tarek Mansour
Archived — this story has rotated out of today’s deck. It is kept here in full.
The gist
Utah charged Kalshi and co-founders Tarek Mansour and Luana Lopes Lara with 14 gambling counts.
The case tests whether federal regulation shields prediction markets from state gambling law.
Background
Tarek Mansour is co-founder and CEO of Kalshi, a New York-based prediction market where users trade on the outcome of future events; he is an MIT graduate and former macro trader at Citadel. Kalshi spent four years securing CFTC (Commodity Futures Trading Commission, the federal derivatives regulator) approval and argues its event contracts are federally regulated derivatives beyond the reach of state gambling law. Utah lawmakers classified prediction-market betting as gambling, and after courts sided with the state, its attorney general brought criminal charges against the company and its founders.
How it unfolded
- 2018Mansour co-founded Kalshi, which spent four years securing CFTC approval to become the first federally regulated U.S. exchange for trading on future events.
- Feb 2026Kalshi sued Utah officials in federal court after state lawmakers classified prediction-market betting as gambling.
- Aug 4, 2026U.S. District Judge Robert J. Shelby ruled the Commodity Exchange Act does not preempt Utah's enforcement of its gambling laws against Kalshi.
- Sep 8, 2026The 10th U.S. Circuit Court of Appeals denied Kalshi's request for an injunction pending appeal.
- Sep 13, 2026 -24, 2026Utah Special Agent Scott Eggerman opened an undercover Kalshi account and placed 12 wagers totaling $114.87 in risk, losing $25.10.
- Oct 26, 2026The CFTC filed a lawsuit to block Utah from enforcing its anti-gambling laws against Kalshi.
- Oct 28, 2026Utah Attorney General Derek Brown's office filed 14 criminal counts against KalshiEX and co-founders Mansour and Luana Lopes Lara; no arrest warrants were sought and the founders were summoned.
- Oct 29, 2026Kalshi announced a $1 billion Series G funding round at a $40 billion valuation, led by Sequoia Capital and Wellington Management.
- Nov 3, 2026Kalshi operated as a midterms hub with election data sourced from the Associated Press, with betting open until elected officials are sworn in.
Key terms
- prediction market
- Open markets where people trade bets on the outcomes of future events, using financial incentives to forecast probabilities.
- CFTC
- Independent U.S. federal agency created in 1974 that regulates derivatives markets, including futures, swaps, and certain options.
- preempt
- In U.S. law, the invalidation of a state law that conflicts with federal law, treaties, or enforcement.
Source: Wikipedia
Who’s saying what
- Official
- Utah Attorney General Derek Brown said gambling is illegal in Utah whether you place the bet, run the game or promote it, and that calling it a 'prediction market' or being federally registered doesn't put a company above the law.
- Party
- A Kalshi spokesperson called the case 'a crazy overreach' and said 'Utah is clearly playing politics,' maintaining the company is a federally regulated exchange whose contracts state gambling statutes do not reach.
- Support
- Mansour told Reason there is a 'big group' of lawmakers in both parties who are 'actually' in favor of prediction market platforms.
- Caution
- Sens. Elizabeth Warren and John Curtis raised concerns to Mansour and Polymarket CEO Shayne Coplan about election-related markets, asking for information on efforts to prevent insider trading, market manipulation and wagers on material nonpublic information.
Still unverified
The criminal charges are allegations, and no court has ruled on them.