In the United States, 14 charges against prediction market Kalshi
The state of Utah in the United States filed 14 charges against the prediction market platform Kalshi and the company’s two founders, alleging they promoted illegal gambling. While the company denied the allegations and announced it would launch a legal fight, the lawsuit brought the dispute over federal and state jurisdiction over prediction markets back to the forefront.
The allegations also include KalshiEX, its CEO Tarek Mansour, and founding partner Luana Lopes Lara. The investigation centers on 12 sports bets placed on the platform by a researcher working for the Utah Attorney General's office.
12 Sports Bets Entered the Criminal File
The Utah investigator opened an account on Kalshi using his address, phone number, and bank card in the state. He then placed bets totaling $114.87 on various sports events. The transactions resulted in a net loss of $25.10.
The prosecutor's office charged each of the 12 transactions with encouraging gambling over the internet. With the addition of allegations of creating a pattern of illegal activity and generally promoting gambling, a total of 14 separate charges were filed. Thirteen of them are classified as serious offenses, while one is considered a misdemeanor.
Instead of issuing arrest warrants for the company executives, a summons was issued to the court. The case is expected to be heard in the Third District Court of Salt Lake County. However, the filing of charges does not mean that Kalshi or its executives are guilty.
Utah Attorney General Derek Brown argued that presenting the transactions as part of a prediction market does not exempt them from the state's gambling laws. Brown said that being registered at the federal level does not automatically shield them from state statutes.
Kalshi, however, denied the accusations and claimed that the Utah administration had exceeded its authority. The company argues that the contracts on its platform are not gambling activities but financial derivatives subject to federal regulation.
Authority Dispute in Prediction Markets Grows
Kalshi allows users to trade contracts based on the outcomes of specific events such as sporting contests, elections, and economic indicators. The value of the contracts changes according to the outcome of the event. The company claims that these trades are overseen by the U.S. Commodity Futures Trading Commission (CFTC) and that states cannot apply gambling laws to them.
Utah's criminal case followed the state’s earlier legal action against the company. The state seeks a refund of fees earned from transactions it deemed illegal in a separate lawsuit and requests that access to certain contracts be blocked.
Meanwhile, the CFTC joined the authority dispute by filing a federal lawsuit against Utah. The agency argues that it has the authority to oversee the relevant contracts in prediction markets registered in the federal system and seeks to prevent the state from applying gambling laws to those transactions.
Kalshi’s earlier petition to halt state intervention was dismissed by a federal court. While the Utah administration interprets the ruling in its favor, the company continues to challenge the state’s regulatory authority.
The new penalty file further complicates the debate over which institution should supervise the derivatives markets, while also bringing the personal criminal liability of corporate executives into the discussion.
Comments
You must sign in to comment.
Sign InYou Might Also Like
Security crisis at the world's largest crypto exchange
The world's largest cryptocurrency exchange Binance confirmed the cyber‑security incident that affected about $6.3 billion of its assets. In its initial statement, the company said that $2.54 billion of assets had been frozen, and in a subsequent update it reported that the amount had risen to roughly $3 billion.
Human‑induced global warming may have averted a new ice age.
It is being assessed that the global warming caused by fossil‑fuel use may have delayed the expected new glacial period in Earth's natural climate cycle. Studies of plant remains and geological traces from past periods suggest that human activities have influenced the development of glaciers.
Sexual Assault Shock on United Airlines Flight: Passenger Has Been Waiting for a Response for 5 Weeks
The woman who said she was sexually assaulted by the male passenger next to her on the Pittsburgh-Chicago flight in the U.S. said she has not received a response from authorities even after 5 weeks since the incident.
.avif){kind=small}