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The U.S. government has asked a federal judge to stop Utah from prosecuting Kalshi and its billionaire co-founders, Tarek Mansour and Luana Lopes Lara, stepping in a day after the state charged them with promoting illegal gambling.
The Commodity Futures Trading Commission and the United States filed a motion on Oct. 29 in U.S. District Court for the District of Utah, seeking a temporary restraining order and a preliminary injunction against the state and Attorney General Derek Brown. Their proposed order would bar Utah from "pursuing criminal or civil enforcement actions related to event contracts listed on CFTC-regulated" exchanges, and would direct the state to dismiss or pause such cases. It would also stop new enforcement actions, subpoenas and other investigative demands.
U.S. District Judge Robert J. Shelby did not rule right away. He scheduled an in-person status and scheduling conference for 1 p.m. on Thursday, Nov. 6.
The federal case
The motion is part of a lawsuit the CFTC and the United States filed against Utah on Oct. 26. They argue that the Commodity Exchange Act, the federal law that governs futures and swaps, overrides Utah's gambling laws when they are applied to event contracts traded on exchanges the agency regulates. "CEA-regulated transactions are not gambling," the complaint says.
"Congress entrusted the CFTC to be the federal regulator with sole responsibility to oversee these markets," CFTC Chairman Michael Selig said when the agency announced the suit. Utah is one of 10 states the CFTC has sued over prediction markets.
Kalshi is not a party to the federal lawsuit.
On Oct. 28, Brown's office filed 14 counts in state court against KalshiEX LLC, Mansour, the company's chief executive, and Lopes Lara, its chief operating officer. The charges include one second-degree felony count of a pattern of unlawful activity, 12 third-degree felony counts of online gambling promotion and one misdemeanor. Prosecutors say an undercover agent placed 12 sports bets on Kalshi from inside Utah in September. The charges are allegations, and no court has ruled on them.
"A federal court has already ruled that Utah's gambling laws apply to Kalshi," Brown said when the charges were filed. "Kalshi kept taking bets from Utahns anyway. That is illegal, and we're putting a stop to it."
Kalshi called the case "a crazy overreach" and said Utah "is clearly playing politics."
The federal motion puts the case back before Shelby, who ruled against Kalshi in August in its own lawsuit against Utah, finding that federal commodities law does not block the state from applying its gambling laws to the company. Kalshi is appealing that ruling.
The federal government has taken the same approach elsewhere. In Arizona, the first state to file criminal charges against Kalshi, a federal judge granted the CFTC's request to block the prosecution.
Kalshi's founders
Mansour and Lopes Lara, both 30, met as students at the Massachusetts Institute of Technology and started Kalshi together. Mansour, an American, grew up in Lebanon. Lopes Lara, who is Brazilian, trained as a professional ballerina before studying computer science. In December 2025, she became the world's youngest self-made woman billionaire.
Each owns about 12% of the company. Kalshi raised $1 billion last week at a $40 billion valuation, which would value each stake at about $4.8 billion.
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