Last updated on May 12th, 2026 at 08:17 pm
Utah is moving to ban sports-related prediction market platforms such as Kalshi and Polymarket, escalating tensions between state regulators and federal authorities over who should control the rapidly growing industry.
Governor Cox has voiced strong concerns about the spread of such platforms. According to a report from Associated Press, he warned that prediction betting effectively places “a casino in the pocket of every American,” adding that the platforms disproportionately target younger users.
Lawmakers passed the HB243 “Gambling Revisions” bill earlier this year, and it is now awaiting the signature of Spencer Cox, the governor of Utah, who has already indicated he intends to approve it.
The legislation classifies “proposition betting” wagers on specific in-game outcomes, such as an athlete’s performance or a team’s statistical milestone, as gambling. By doing so, the state aims to prevent platforms from offering sports-related prediction contracts under the label of prediction markets rather than traditional sportsbooks.
If signed into law, the bill would formally block prediction-market companies from offering sports-related markets within the state.
Kalshi challenges Utah law in federal court
The dispute has already spilt into the courts. In February, Kalshi filed a lawsuit against Utah, seeking a federal judge’s order to stop the state from enforcing its gambling restrictions against the platform.
Kalshi argues that its event contracts are not gambling but federally regulated derivatives. According to the company, oversight of these markets falls exclusively under the Commodity Futures Trading Commission (CFTC) through the Commodity Exchange Act, meaning individual states cannot prohibit them.
The legal battle is expanding beyond Utah. Kalshi also filed a lawsuit against Iowa over potential enforcement actions. At the same time, a federal judge in Ohio recently rejected the company’s request to block state regulators from applying gambling laws to its sports event contracts.
Federal regulators defend authority over prediction markets
The regulatory conflict is further complicated by the CFTC’s stance that prediction markets fall within its jurisdiction. Speaking at an industry conference in Florida, CFTC Chairman Michael Selig emphasized that the agency intends to defend its authority in court if challenged.
Selig also framed prediction markets as valuable information tools. When participants risk real money on their forecasts, he argued, markets can generate clearer and more accountable signals about future events.
The SEC recently signalled that prediction markets are fast becoming a major regulatory concern in Washington. Atkins described the rapid expansion of these platforms as “a huge issue” for federal authorities, citing legal ambiguity and overlapping oversight.
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