Kalshi Co-Founders Face Criminal Charges

GRAND RAPIDS, MI. - Utah filed 14 criminal charges against prediction market platform KalshiEX LLC and its co-founders, CEO Tarek Mansour and COO Luana Lopes Lara, on October 28, 2026. The charges include one second-degree felony for a pattern of unlawful activity, twelve third-degree felonies for promoting online gambling, and one misdemeanor for general gambling promotion, stemming from an undercover investigation.

The Utah Attorney General's Office initiated the charges after an investigator placed 12 sports wagers totaling $114.87 between September 13 and September 26, 2026, using an account registered in Utah. Kalshi and its co-founders maintain their event contracts are federally regulated derivatives overseen by the Commodity Futures Trading Commission (CFTC), arguing they are not subject to state gambling laws. Utah Attorney General Derek Brown stated gambling is illegal in Utah regardless of its label and federal registration does not exempt companies from state law.

This legal action follows a federal court ruling on August 4, 2026, where U.S. District Judge Robert J. Shelby found federal law does not prevent Utah from enforcing its gambling laws against Kalshi. Kalshi appealed this decision, and the Tenth U.S. Circuit Court of Appeals denied their request to block enforcement during the appeal. On October 27, 2026, the CFTC and the U.S. government filed a motion in federal court seeking to stop Utah from prosecuting Kalshi, arguing state enforcement actions infringe upon federal regulatory authority.

Kalshi called the charges a "crazy overreach" and accused Utah of "playing politics," stating the company plans to fight the charges in court alongside a growing list of other legal actions against them by a coalition state Attorneys General.