Ohio platforms defy federal market as Utah claims $61m from Kalshi

Derek Brown stood at a podium on Tuesday and said something that state attorneys general rarely need to say about a federally licensed exchange: "Utah has said no to gambling since statehood in 1896, and that didn't change when betting moved onto cellphones." The line was clean, and it was meant to be. Brown's lawsuit against Kalshi, filed in state court, names Susquehanna International Group and Susquehanna Government Products alongside several Kalshi affiliates, and demands somewhere between $30.6 million and $61.2 million — the range reflecting uncertainty about fee structures rather than uncertainty about intent.

The $61.2 million figure is the ceiling only if you count every dollar Kalshi collected from the platform's more than 32,000 verified Utah accounts. Brown wants the money back, wants geolocation controls ordered by the court, and wants Kalshi's event contracts blocked entirely for Utah residents. What makes this particular lawsuit harder to dismiss than the others is that Utah's gambling prohibition is not a licensing regime Kalshi might one day navigate — it is a constitutional and statutory near-total ban that has not bent since 1896. There is no licence to obtain, no framework to satisfy. The preemption argument Kalshi has relied on elsewhere runs directly into a state that has nothing it needs preempted.

The federal circuit split is now doing real work against Kalshi in ways that were not visible six months ago. The Third Circuit sided with the company in its New Jersey dispute. The Sixth Circuit went the other way in Ohio and Tennessee. The 10th Circuit, which covers Utah, denied an injunction pending Kalshi's appeal of the August district court ruling that found Utah law was not preempted. Three circuits, three different pressure points, all moving simultaneously. New Jersey has now asked the Supreme Court to settle it, backed by a bipartisan coalition of state attorneys general — which means the question that resolves everything may sit unanswered for another year or more while enforcement accelerates at the state level.

I've watched preemption arguments carry prediction markets through regulatory pressure before, and they work well enough when courts are still genuinely uncertain. What changes is when one circuit publishes a ruling and a state attorney general in a different circuit treats it as precedent for action. That's what Utah is doing with the 10th Circuit's August decision. It isn't waiting for the Supreme Court. It is converting a denial of an injunction into a damages claim.

The consensus reading in this space is that the Supreme Court petition from New Jersey eventually produces a ruling that settles the circuit conflict and resolves federal preemption one way or the other. I don't think that timeline matches the pace of state enforcement. Utah will have a judgment — or a settlement — before the Supreme Court finishes briefing. That judgment, whatever it produces, sets a floor for what other no-gambling states believe they can extract. The litigation map is being drawn by the states faster than the federal docket can contain it, and Kalshi's federally licensed exchange status is not stopping any of it.