Utah prosecutors officially filed 14 criminal charges against prediction market exchange KalshiEX LLC along with two of its top executives, Chief Executive Officer Tarek Mansour and co-founder Luana Lopes Lara, on Wednesday, October 28, 2026. The law enforcement action moves the platform’s operations into the criminal justice arena over illegal gambling allegations.
The court filing details 13 felony counts and one misdemeanor. Prosecutors charged Kalshi and its founders with third-degree felony online gambling promotion alongside second-degree felony pattern of unlawful activity charges.
Undercover Agent and 12 Sports Bets
The investigation stems from Scott Eggerman, an agent with the Utah Attorney General’s Office who went undercover and registered an account on Kalshi on September 13, 2026. Eggerman signed up using a Utah residential address, phone number, and debit card.
Through the undercover account, the agent placed 12 bets across various sporting competitions, including baseball, hockey, soccer, college football, and the NFL. The total amount wagered reached $114.87, resulting in a net loss of $25.10.
One of the transactions occurred on a college football game between Utah and Utah State on September 19, 2026. The agent staked $5 on a contract predicting a margin of victory exceeding 27.5 points. When the game ended in a 36-point blowout for Utah, the agent cashed out a $4.13 profit.
Prosecutors also highlighted the transaction fees collected by the platform, alleging Kalshi took cuts ranging from 3 cents to 78 cents on each transaction executed by Utah users.
Clash Between State Jurisdiction and Federal Approval
Utah Attorney General Derek Brown emphasized state legal boundaries, stating that labeling the platform a prediction market does not change the fact that the contracts traded constitute gambling under Utah state law.
Kalshi denied the allegations, calling the Utah prosecution’s move “crazy overreach” driven by political motives. The company expressed confidence that it will prevail in court.
The criminal charges follow just eight days after Utah filed a civil lawsuit on October 20, 2026. In that complaint, the state demanded the return of allegedly illegal transaction fees valued between $30.6 million and $61.2 million.
The Utah legal challenge escalates a broader jurisdictional clash pitting state enforcement authority against federally regulated event contract derivatives under the oversight of the Commodity Futures Trading Commission (CFTC). The Utah Third Judicial District Court in Salt Lake County has issued court summonses for Mansour and Lopes Lara rather than arrest warrants.
Via crypto.news.
Previously: Utah Sues Kalshi for $60M Over Gambling Allegations - CFTC Countersues Attorney General in Federal Court
Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
