Utah Names Kalshi Founders in 14-Count Criminal Case

It is separate from Utah’s October 20 civil lawsuit against the prediction-market operator. Arizona had previously brought criminal charges against Kalshi entities, but Utah’s filing also targets the company’s CEO and COO.

Twelve Trades Generated $3.36 in Fees

Special Agent Scott Eggerman opened a Kalshi account on September 13 using a Utah residential address, a local phone number and an undercover debit card. His IP address placed him in Utah.

Over the following two weeks, he traded on football, baseball, soccer and hockey outcomes. The individual stakes ranged from $4 to $30, adding up to $114.87.

The 15-page charging document also records a fee for every transaction. Together, those fees came to $3.36, according to 15M’s calculation.

Prosecutors divided the allegations into three parts:

• 12 third-degree felony counts of online gambling promotion, one for each trade.
• One second-degree felony count of pattern of unlawful activity.
• One class A misdemeanor for general gambling promotion.

The fees are part of the prosecution’s argument. Utah alleges that Kalshi collected proceeds from transactions it considers illegal and used that revenue to operate its business. The amount earned from the test account was small. The alleged pattern, rather than the dollar value alone, is central to the felony case.

The Account Was Identified as Being in Utah

Eggerman’s first transaction was a $10 position predicting that the New York Giants would beat the Dallas Cowboys. Before allowing it, Kalshi asked him to confirm his location through location services.

He confirmed Utah. The trade went through, with a $0.44 transaction fee.

The investigator subsequently recorded Utah-based IP and geolocation information while making further trades from Salt Lake and Davis counties. The complaint does not describe an attempt to disguise his location.

This happened after an August 4 federal court ruling rejecting Kalshi’s argument that federal commodities law prevented Utah from enforcing its gambling restrictions. Kalshi appealed, but the Tenth Circuit denied its request for an injunction pending appeal on September 8.

The location checks therefore raise a different question from whether geolocation technology worked. Utah says Kalshi continued allowing sports contracts to be traded from a jurisdiction where gambling is prohibited. Kalshi disputes the state’s authority to regulate those contracts.

Criminal Charges Arrive During a Federal Court Fight

The Commodity Futures Trading Commission is taking Kalshi’s side on jurisdiction. On October 27, the CFTC announced a lawsuit against Utah, seeking to prevent the state from enforcing its gambling laws against federally registered contract markets.

Kalshi called the criminal prosecution political overreach and told Reuters it would challenge the case, referring to an earlier Arizona prosecution blocked by a federal judge.

Mansour and Lopes Lara have been issued court summonses rather than arrest warrants. Prosecutors cite Mansour’s authority over corporate strategy and Lopes Lara’s control of operations, product development and markets to support their allegations involving the two executives.

The charges remain unproven. No conviction has been entered against Kalshi or either founder in the Utah case.