US government and CFTC ask court to halt Utah's criminal and civil cases against Kalshi

The United States and the Commodity Futures Trading Commission (CFTC) filed an emergency motion for a temporary restraining order and preliminary injunction on Thursday, October 29, in the US District Court for the District of Utah, seeking to stop the state’s criminal and civil cases against Kalshi.

The motion is part of their October 26 lawsuit against the State of Utah and Attorney General Derek Brown, which argues that federal commodities law preempts Utah’s gambling laws. Kalshi is not a party to that case.

District Judge Robert J. Shelby did not rule on the request straight away and scheduled an in-person status and scheduling conference for Friday, November 6, at 1:00 PM. The federal plaintiffs must serve the order, the motion and the complaint on both defendants by 5:00 PM on Tuesday, November 3.

The proposed order

Under the proposed order, Utah would be “enjoined from pursuing criminal or civil enforcement actions related to event contracts listed on CFTC-regulated DCMs.” The draft also directs Utah to “either dismiss any applicable enforcement actions or seek stays in those cases until otherwise directed by this Court.”

The criminal case

The motion followed a charging document dated October 28 that lists 14 counts against KalshiEX LLC, with CEO Tarek Mansour and COO Luana Lopes Lara named as co-defendants. No arrest warrants were sought, and the co-founders were instead summoned to respond. The charges are allegations, and no court has ruled on them.

“A federal court has already ruled that Utah’s gambling laws apply to Kalshi,” Brown said in a statement reported by KUER.

Kalshi called the case “a crazy overreach; Utah is clearly playing politics. We look forward to putting a stop to this in court, just like we did in Arizona.”

Kalshi sued Utah officials in federal court in February, and on August 4 Judge Shelby granted summary judgment to the state. The Tenth Circuit denied Kalshi’s request for an injunction pending appeal on September 8.