CFTC v. Utah: The Federal Government Asks the Judge Who Already Ruled Against Kalshi

The CFTC Wants Utah's Prediction Market Cases Frozen

The Commodity Futures Trading Commission is asking a Utah federal judge to temporarily block the state from pursuing enforcement actions against prediction market platforms, including Utah's civil and criminal cases against Kalshi, as Law360 reported. On Thursday, October 29, 2026, the United States and the CFTC filed an emergency motion for a temporary restraining order and preliminary injunction, according to Gambling Insider's coverage of the motion.

The motion sits before Judge Robert J. Shelby, the same judge who, on August 4, 2026, granted Utah summary judgment in KalshiEX LLC v. Cox and held that the Commodity Exchange Act does not preempt Utah's anti-gambling laws as applied to Kalshi's sports event contracts, per Judge Shelby's memorandum decision.

The federal government is now asking that court to reach a different result on a closely related question, with a different plaintiff and a much broader requested order.

How a Preemption Fight Became a Criminal Case

The sequence moved fast. On October 20, 2026, Utah filed a civil enforcement action in state court in Salt Lake City against Kalshi entities and two Susquehanna firms, according to Corporate INTL's timeline. The United States and the CFTC sued the State of Utah and Attorney General Derek Brown on October 26, 2026, in United States v. State of Utah, No. 2:26-cv-01055, according to the federal court docket.

Two days later, on October 28, 2026, Utah filed 14 criminal counts against Kalshi and co-founders Tarek Mansour and Luana Lopes Lara, as reported by the Deseret News. Corporate INTL's summary describes the count breakdown as one second-degree felony pattern count, 12 counts of online gambling promotion, and one misdemeanor. Utah alleges Kalshi made between $30.5 million and $61.1 million from Utah accounts, according to the Deseret News.

Kalshi itself is not a party to the federal case. Its own appeal of the August ruling remains pending at the Tenth Circuit, which on September 8, 2026 denied Kalshi an injunction pending appeal, according to Gambling Insider's case table.

Reading the Signal: The Proposed Order Is the Story

The proposed order would enjoin Utah from "pursuing criminal or civil enforcement actions related to event contracts listed on CFTC-regulated DCMs." It would also reach "subpoena process, or other compulsory investigative process" and would direct Utah to "either dismiss any applicable enforcement actions or seek stays," according to Gambling Insider.

A distinction that matters

Kalshi's August loss was about one company's sports contracts. The CFTC's motion asks the court to bar Utah from enforcement and compulsory investigative process tied to event contracts on CFTC-regulated designated contract markets. That is a jurisdictional claim, not a defense of one operator.

What the court has done so far

Judge Shelby did not rule immediately. He set an in-person status and scheduling conference for November 6, 2026 at 1:00 PM. As of the latest reporting available, no TRO or injunction had been granted. The August opinion is the only public record of how this court reads the statute.

What Prediction Market Leadership Should Decide Now

For founders and executives running or listing on event-contract venues, registration with the CFTC is not, on the current record in Utah, a shield against state criminal process.

Decisions for this quarter

• Map state exposure by contract type. The August ruling addressed sports event contracts; ask your general counsel which listed products sit in the same category.
• Treat founder liability as a board item. Utah charged the co-founders personally, which changes indemnification, D&O coverage, and travel questions.
• Prepare for compulsory process. The CFTC's proposed order specifically names subpoenas.
• Track the federal docket weekly. A scheduling order or ruling in No. 2:26-cv-01055 could change your Utah posture quickly.

Utah is the tenth state the CFTC has sued over prediction markets, per Covers. Each state is a separate front.