Utah files criminal charges against Kalshi and its two founders over an undercover agent’s sports bets

Utah’s attorney general has filed criminal charges against KalshiEX LLC, the company behind the Kalshi prediction market, and named its two co-founders, chief executive Tarek Mansour and chief operating officer Luana Lopes Lara, as co-defendants. The charging document, dated 28 October 2026 and brought in the Third Judicial District Court in Salt Lake County, lists 14 counts: 13 felonies and one misdemeanor. They rest on twelve sports bets of $4 to $30 that an undercover state agent placed on Kalshi from Utah in September.

The Kalshi criminal charges are accusations, not findings. The document is an Information backed by a sworn declaration of probable cause, the paperwork a prosecutor uses to open a case. No court has ruled on the facts, and Kalshi, Mansour and Lopes Lara are presumed innocent.

“Gambling is illegal in Utah, whether you place the bet, run the game, or promote it,” Attorney General Derek Brown said, as quoted by The Block, Decrypt and FOX 13. Kalshi answered through a spokesperson: “This is a crazy overreach; Utah is clearly playing politics.” The company added: “We look forward to putting a stop to this in court, just like we did in Arizona.”

The charges came on 28 October, two days after the United States and the Commodity Futures Trading Commission filed a federal suit to stop Utah’s enforcement against Kalshi, announced on 27 October and covered in our report on the US and CFTC lawsuit against Utah. Utah had already sued Kalshi in civil court on 20 October, as told in our piece on the civil suit naming two Susquehanna firms. This case is criminal, and it names two people.

What the Kalshi criminal charges say, count by count

Special Agent Scott Eggerman of the attorney general’s office swore to the declaration at 12:41 PM on 28 October. Criminal Deputy Attorney General Stewart M. Young authorised the filing the same day, and assistant attorneys general Christopher White and Wesley R. Stapley are also listed for the state. The case number and the judge’s name are blank in the published copy.

Count 1 is the heaviest: a pattern of unlawful activity, a second-degree felony under Utah’s racketeering-style statute, from 13 to 26 September 2026 in Salt Lake and Davis counties. The theory is that Kalshi took a fee on each bet, that each bet was illegal online gambling under Utah law, and that the fees went into running the business, which the document calls an enterprise.

Counts 2 to 13 are third-degree felonies for online gambling promotion, one per bet. Count 14, general gambling promotion, is a Class A misdemeanor covering the whole period: it says Kalshi drew an economic benefit from the agent’s wagers and helped him complete them.

Every count is worded against KalshiEX LLC, “either directly or as a party”, and adds that the conduct was authorised or “recklessly tolerated” by the company’s board or high managerial agents. The founders appear as co-defendants in the caption and are tied to the company in the declaration. Reuters, KUER and FOX 13 report that the company and both founders are charged. Reports of 14 felonies, or of 14 counts for each founder, do not match the document.

FOX 13 reported that Mansour and Lopes Lara were issued summonses to appear in court, in line with the caption, “Co-Defendant Information (Summons)”. No arrest has been reported.

Twelve bets between $4 and $30, placed from Salt Lake and Davis counties

The sting began on 13 September 2026. Agent Eggerman opened an account on Kalshi’s website under an undercover name, with an undercover Visa debit card, a Utah address, a Utah phone number and an account at a Utah bank. Before each session, the declaration says, he checked that his geolocation and public IP address placed him in Utah. Kalshi also asked him to confirm his location through location services before his first bet, and he did.

Over the next twelve days he bet on five leagues: the NFL, NCAA college football, Major League Soccer, Major League Baseball and the NHL. Several bets involved local teams, among them the Utah Utes, the Utah State Aggies, Real Salt Lake and the Utah Mammoth. For each one the declaration gives the stake, the chance of a payout the platform displayed, the fee and the result.

Added up from the declaration, the twelve stakes come to $114.87 and the fees to $3.36. The biggest fee was 78 cents, on the $20 Troy bet; the smallest, 3 cents. Six bets won and six lost. Small sums are enough for Count 1: Utah treats each fee as proceeds of illegal gambling, and the declaration lists the twelve wagers as Episode One to Episode Twelve of a pattern.

The document also describes how Kalshi earns money, through a “weighted transaction fee” on each wager, and says Kalshi uses part of its revenue to pay market makers through incentive programs. That links the criminal case to the civil one, where Utah sued two Susquehanna firms as market makers, but the Information names no market maker and charges none. It identifies the platform as a website and a smartphone app called “Kalshi: Trade Football & More”.

Why the founders are named: their own words about control

The state does not say Mansour or Lopes Lara placed bets, sent messages or handled the agent’s account. It ties them to the case through public recordings of their own statements, which the agent says he found and reviewed during the investigation.

In those recordings, according to the declaration, Mansour asserts that he exercises substantial, direct control over Kalshi’s business decisions, strategy and operations, supervises employees directly and has practical authority over what work is done and how. Lopes Lara, the document says, has stated that Kalshi’s internal operations are centralized on her, that she too has substantial, direct control over them, and that she oversees product, design, engineering, markets and marketing.

Paragraphs 23 and 24 then make the same claim about each founder: as co-founder and officer, each acquired or kept control of an enterprise, Kalshi, through a pattern of unlawful activity and took part in running its affairs through it. The document alleges nothing more personal.

That personal exposure is new for a company the CFTC regulates. The agency shares Kalshi’s view that trading on prediction markets falls under its exclusive jurisdiction, Reuters reported. Brown’s reply, in a statement to FOX 13: “Calling it a ‘prediction market’ doesn’t change what it is, and being federally registered doesn’t put a company above the law.” He told KUER: “A federal court has already ruled that Utah’s gambling laws apply to Kalshi. Kalshi kept taking bets from Utahns anyway. That is illegal, and we’re putting a stop to it.”

The criminal case follows a federal ruling Kalshi lost in Utah

The declaration sets out the road to the charges. Kalshi sued Governor Spencer Cox and other Utah officials in federal court on 23 February 2026, asking for a ruling that the Commodity Exchange Act preempts Utah’s gambling laws. On 4 August, US District Judge Robert J. Shelby found that it does not and granted summary judgment to the state. Kalshi appealed, and on 8 September the Tenth Circuit refused it an injunction while the appeal runs.

The undercover account was opened five days later. The declaration says that despite the two rulings, “Kalshi, Tarek Mansour, and Luana Lopes Lara have continued to provide or offer to provide online gambling” in Utah.

Two tracks now run against each other. In federal court, Washington argues that only the CFTC can police Kalshi’s contracts. In a Salt Lake County courtroom, Utah treats the same contracts as crimes.

Arizona tried criminal charges in March, and a federal judge stopped them

Utah is the second state to go criminal. Reuters reported that only Arizona had previously brought a criminal case against Kalshi, and that a federal judge later blocked it. Arizona filed its charges in March 2026. KUER reports that Arizona is now trying to revive its case after a Ninth Circuit ruling that went Nevada’s way.

Kalshi’s promise to stop Utah’s case as it did in Arizona points to that federal-court route. Whether it will ask a federal judge in Utah to halt the prosecution is not known, and the ground there is less friendly: Judge Shelby has already ruled against Kalshi on preemption.

Appeals courts are split, and the Supreme Court has been asked to decide

Behind all these cases sits one question: can a CFTC-registered market be held to state gambling law? Federal appeals courts disagree. Decrypt lists the split: the Third Circuit ruled for Kalshi against New Jersey in April, while the Sixth and Ninth Circuits sided with Ohio, Tennessee and Nevada in August and September. New Jersey has asked the Supreme Court to settle it, backed by 39 other states and the District of Columbia, Decrypt reports. Reuters expects the Supreme Court to have the final word.

Sports leagues are taking sides too. Our report on the NBA’s pact with the CFTC and the NFL’s support for the states at the Supreme Court covers that part of the fight.

The charges concern sports contracts, not Kalshi’s crypto markets

Every bet in the Information is on a sports event. None involves bitcoin or any other crypto contract, and the document does not mention crypto at all.

Crypto traders still have reasons to follow the case. Kalshi lists bitcoin contracts, and bets on bitcoin across Kalshi and Polymarket reached a reported $2.7 billion in a single week, as covered in our look at crypto volume on prediction markets. In October Kalshi also said it would let traders borrow against bitcoin to margin its perpetual futures, and the Phantom wallet opened Kalshi markets to its US users. A criminal case naming the founders hangs over the company that runs those products, even if the counts are limited to sports.

For readers in Europe, the case turns on Utah and US federal law. It changes nothing in EU rules, and Kalshi’s contracts are priced in dollars.

What a prediction market is, and why states call it gambling

A prediction market lets users buy contracts that pay out if an event happens, such as a team winning or a price crossing a level. Kalshi says its contracts are federally regulated derivatives, overseen by the CFTC. Several states, Utah among them, say a contract on a game’s score is a sports bet by another name and needs a state gambling licence. Our Kalshi project page explains how the platform works and lists its disputes with the states.

What is still unknown

The published copy of the Information leaves several blanks, and the reporting so far fills only some of them.

• The case number and the judge are not given, and no date for a first appearance has been reported.
• It is not known whether the summonses have been served, or whether Mansour and Lopes Lara will appear in person.
• The document does not say what penalties Utah will seek, against the company or the founders.
• Kalshi has not said whether it will ask a federal court to stop the prosecution, as it did in Arizona, or whether the CFTC will raise the criminal case in its own suit against Utah.
• No change to Kalshi’s service for people in Utah has been reported.

No separate comment from Mansour or Lopes Lara has been reported, and no court filing in reply had been found by midday on 29 October. The next fixed point is the first hearing in the Third Judicial District Court, once a date is set.