Prediction markets are at the center of a federal-state jurisdiction dispute after the US Commodity Futures Trading Commission sued Utah and its attorney general over the state’s planned action against Kalshi and its affiliates.

Why the CFTC sued Utah

The CFTC filed its lawsuit in the US District Court for the District of Utah on October 26, 2026, a week after state officials announced legal action over allegedly illegal betting on Kalshi.

Utah Attorney General Derek Brown said the state would sue to compel Kalshi and its affiliates to return up to $60 million in profits allegedly obtained illegally. The CFTC argues that Utah is attempting to restrict the operation of federally registered exchanges in conflict with congressional intent.

Prediction markets and federal authority

The regulator argues that the event contracts targeted by Utah are swaps under the federal Commodity Exchange Act and that the exchanges offering them are CFTC-regulated designated contract markets. CFTC Chair Michael Selig has maintained that the agency has exclusive jurisdiction over prediction markets.

The Utah dispute is one of several involving state authorities and Kalshi. New Jersey officials petitioned the US Supreme Court in September to review their case against the platform. As of October 27, the court had not announced whether it would hear the case.

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