Utah files criminal charges against Kalshi and its two founders
On 28 October 2026 Utah's attorney general filed criminal charges against the prediction market Kalshi and its co-founders Tarek Mansour and Luana Lopes Lara, alleging they promoted illegal online gambling. Kalshi calls the case political overreach, and a federal regulator had sued Utah the day before.
Prediction markets are not a US-only argument. South African bookmakers asked for a ban on them earlier this year, and the legal question underneath is the same one South African regulators face: when a product pays out on the result of a sports event, is it gambling? The Utah case shows one jurisdiction treating it as exactly that. Nothing in it changes what is legal for you to use in South Africa, but it is a useful signal of how seriously regulators now take these platforms, and a reminder that offshore products can be unlicensed locally even when they look like finance apps.
What Utah has charged
Utah Attorney General Derek Brown filed three separate sets of charges in state court on 28 October 2026, against the company KalshiEX, its chief executive Tarek Mansour and its chief operating officer Luana Lopes Lara.
According to a report by Reason that links the filing, each defendant faces one count of general gambling promotion (a class A misdemeanour), one count of pattern of unlawful activity (a second-degree felony) and 12 counts of online gambling promotion (third-degree felonies). iGaming Business reports that the twelve online counts trace back to an undercover agent placing 12 sports trades on the platform for a total of $114.87.
The federal dispute behind it
Reuters reports that the charges came a day after the US Commodity Futures Trading Commission sued to stop Utah enforcing its anti-gambling laws against the company. Utah had also sued Kalshi earlier in October, describing gambling as a public nuisance.
Kalshi has faced litigation from more than a dozen states, and federal appeals courts have not agreed on whether sports event contracts count as swaps under federal law, which is the heart of the argument. A Kalshi spokesperson called the Utah action a "crazy overreach" and said the state was playing politics.
These are charges, not convictions. Nothing has been decided in court on whether the conduct was unlawful.
What it means for South African players
The charges do not apply in South Africa and do not make any product here legal or illegal. What they show is that regulators are no longer treating sports-linked contracts as a grey area that sits outside gambling law.
If you come across a platform that lets you trade on match results, check who licenses it and whether it is permitted for South African residents before you put money in. Under the National Gambling Act, no operator currently holds a licence for remote casino games in South Africa, and our casino pages separate "not licensed here" from "accepts South African players" for that reason. Any betting or trading carries a real risk of loss, and it is entertainment, not income.
What to watch next
- How the federal court handles the CFTC challenge to Utah's enforcement
- Whether other states copy the criminal route instead of civil suits
- Any ruling that settles whether sports contracts are swaps or gambling