Utah moves to ban prediction markets including Polymarket and Kalshi
The state of Utah plans to restrict the operation of prediction market platforms, including Kalshi and Polymarket. Bill HB243, which focuses on revising gambling regulations, has been sent to the governor for signature.
The document was previously approved by the House of Representatives on February 10 and by the Senate on February 27.
The law classifies prop bets as a form of gambling. These are bets on specific events within a game, such as an athlete’s statistics. The legislation is intended to prevent such services from operating in the state. Authorities argue that these platforms effectively function as sportsbook services.
Governor supports strict restrictions
Utah Governor Spencer Cox said he plans to sign the bill. According to him, such services turn a smartphone into a “pocket casino.” He also expressed concern that these platforms could attract younger audiences.
Authorities believe prediction markets may bypass traditional gambling regulations. The law aims to prevent the use of platforms that describe themselves as prediction markets but effectively offer sports betting. Once the law comes into force, such services could be blocked within the state.
Kalshi files lawsuit against the state
The platform Kalshi has already filed a lawsuit against Utah authorities. The company is asking a federal court to block the law from being applied to its operations. Kalshi argues that its contracts are financial derivatives rather than gambling products.
According to the company, the regulation of such markets falls under the authority of the U.S. Commodity Futures Trading Commission (CFTC). Under the Commodity Exchange Act, the federal regulator should oversee these products. The company has also filed a similar lawsuit against the state of Iowa.
Debate over prediction market regulation intensifies
The federal regulator CFTC has stated that it has the authority to regulate prediction markets. Commission Chairman Michael Selig said the agency is prepared to defend its jurisdiction in court. According to him, such markets can be useful tools for forecasting future events.
He described them as “truth machines,” since participants place bets using their own money. This creates more transparent signals about the probability of future events. However, the conflict between federal and state authorities shows that the legal status of prediction markets in the United States remains disputed.
Recently we wrote that prediction market platforms Kalshi and Polymarket are discussing the possibility of raising new capital at valuations of around $20 billion each. According to sources, talks with potential investors are still at an early stage.
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