CFTC and Justice Department sue Utah over prediction markets

The Commodity Futures Trading Commission and the Justice Department sued Utah on October 26, 2026, seeking to prevent the state from enforcing gambling laws against federally regulated prediction-market transactions. The lawsuit names Utah and Attorney General Derek Brown as defendants and asks a federal court to issue preliminary and permanent injunctions. The agencies argue that the Commodity Exchange Act gives the CFTC authority over event contracts traded on federally regulated exchanges, and that federal law preempts state restrictions on those transactions. The requested injunction would cover investigations and enforcement involving covered contracts, including actions affecting regulated exchanges’ affiliates and partners. The court has not ruled on the request. Utah argues that Kalshi’s contracts constitute unlawful gambling under state law. The state filed a separate lawsuit against Kalshi businesses on October 20, seeking to restrict certain offerings and recover fees it alleges were unlawfully collected. Utah’s complaint estimates those fees at $30.6 million to $61.2 million through October 19. That amount is the state’s estimate, not a court-ordered payment. The...