Taos and Salt Lake City are pulling in the same direction on Kalshi

In August, a federal district judge in Utah ruled that the Commodity Exchange Act does not preempt Utah's gambling statutes. Kalshi appealed. The Tenth Circuit declined to halt enforcement while that appeal proceeds. On Tuesday, Utah Attorney General Derek Brown stood at a news conference and said something that will be quoted in briefs for the next several years: "Utah has said no to gambling since statehood in 1896, and that didn't change when betting moved onto cellphones."

Brown's complaint names Kalshi, several affiliates, and two Susquehanna entities — Susquehanna International Group and Susquehanna Government Products — as defendants. The state wants Kalshi's event contracts pulled from Utah entirely, court-approved geolocation controls installed, and somewhere between $30.6 million and $61.2 million in fees surrendered. That range exists because the complaint calculates the figure two ways; the state has not committed to which number it believes is correct, which is the kind of prosecutorial flexibility that makes defendants uncomfortable.

More than 32,000 Utah residents held verified accounts on Kalshi as of February. Utah has no legal gambling of any kind — no sports betting, no casinos, no lottery. That is not a technicality. It is a deliberate constitutional and statutory posture that the state has maintained across every expansion of American gambling law for the past century. Kalshi is not facing a state that drew a line reluctantly. It is facing a state that drew the line first.

Kalshi's position has not changed: the CFTC holds exclusive jurisdiction over its contracts as federally regulated derivatives, and no state should hold veto power over a national market. That argument has won in the Third Circuit, which sided with Kalshi against New Jersey. It has lost in the Sixth Circuit, which rejected the same argument in Ohio and Tennessee. The Tenth Circuit has not yet ruled on the merits — only on the injunction request. New Jersey has petitioned the Supreme Court to resolve the split.

The consensus read on this litigation is that the Supreme Court petition is the event that matters, and everything happening in state courts is noise while the federal question resolves. That read is probably adjusting for the wrong variable. State enforcement actions do not pause for federal appellate timelines. Brown is not waiting for the Supreme Court. He is building a damages record now, and Susquehanna's inclusion as a named defendant means the state is constructing a theory of market-maker liability that would survive even a favorable federal ruling for Kalshi on the preemption question — because a preemption win tells you which regulator has authority, not that no conduct was unlawful.