UTAH — The Republican-controlled Utah state legislature in March expanded the state's legal definition of gambling to include "proposition bets," defined as a gambling bet on an individual action, statistic, occurrence or non-occurrence. Governor Spencer Cox signed the measure later that month, targeting prediction market platforms operating in the state.

The law is part of a broader effort by Utah Republican leaders to oppose prediction markets, which allow users to trade on outcomes ranging from elections to sports to geopolitical events. State lawmakers have also moved to amend the Utah constitution to reinforce their position against the platforms.

"Prediction markets are gambling – pure and simple," Cox said. "Prediction markets have no place in Utah." The governor said he would use every resource within his disposal to challenge prediction market platforms in court.

Utah Attorney General Derek Brown argued that placing a trade on prediction market platforms is simply a bet dressed up in different clothing. "A wolf in sheep's clothing is still a wolf," Brown said. "You can bet on it."

The state's stance places its Republican leadership at odds with the Trump administration, which has embraced the prediction market industry. Federal regulators under President Donald Trump backed the classification of prediction market products as financial exchanges governed by federal commodities law rather than state gambling rules. The Commodity Futures Trading Commission, which under President Joe Biden had sought to impose restrictions and ban certain event contracts tied to elections, politics and sports, reversed course and filed a friend-of-the-court brief in February defending its exclusive jurisdiction over the platforms. Donald Trump Jr. serves as an adviser to both Kalshi and Polymarket, and Trump Media and Technology Group has explored launching its own prediction market product.

"It's a unique issue. Because you have a lot of very conservative Republicans [in Utah] who are standing up to a conservative administration, essentially without dissent among them," Republican state Senator Brady Brammer said. "We have a president who operates casinos," Brammer said. "He clearly has no problem with gambling, and so it's not overly surprising that his agency heads, particularly in this space, are much more gamble-friendly than they previously have been, but Utah is not."

Kalshi, recently valued at $22bn, filed a lawsuit in February against Cox and Brown, alleging Utah was preparing to block it from offering event contracts on its federally regulated exchange. The company is seeking an injunction against any Utah ban, contending that such a prohibition would interfere with federal regulations on financial derivatives. A company spokesperson said the platform operates like any other derivative market. "Whether a state has gambling operations or whether they ban it is irrelevant to federal law, which says you can have nationwide exchange for event contracts," the spokesperson said. "This is for the CFTC to decide, not the states."

About 20 federal lawsuits have been filed nationwide against prediction market platforms, with early rulings producing mixed results. A federal judge in Arizona blocked that state from pursuing criminal charges against Kalshi tied to alleged violations of state gambling laws, while Kalshi has faced legal setbacks in Nevada and Tennessee. In November 2024, the FBI raided the home of Polymarket's founder.