Utah’s anti-gambling tradition meets Kalshi and Polymarket in a new legal fight

For more than a century, Utah has maintained some of the nation’s strictest gambling prohibitions, with no casinos, lotteries, or betting racetracks. This stance, deeply rooted in the conservative values of The Church of Jesus Christ of Latter-day Saints, is now being tested by a new challenge: online prediction markets accessible via smartphones.

The state is poised to enact legislation targeting platforms like Kalshi and Polymarket, which allow users to wager on outcomes ranging from weather events to potential military conflicts. These digital platforms have sparked a fierce debate about whether they constitute legitimate financial services or simply represent a new form of gambling.

“We are putting a casino in the pocket of every single American, and they are targeting especially young people,” said Governor Spencer Cox, who has committed to signing the new legislation. “It is really awful what they are doing, and we are going to make sure this doesn’t happen in our state.”

This decision puts Utah at odds with the federal government, particularly the Commodity Futures Trading Commission (CFTC), which backs Kalshi in its lawsuit against the state. The conflict represents a significant cultural, political, and economic battle with national implications.

The emerging prediction market industry boasts significant financial backing, with both Kalshi and Polymarket estimated to be worth $20 billion each following their most recent fundraising rounds. These platforms have cultivated influential connections in Washington, including Donald Trump Jr., who serves as an adviser for both companies and has invested in Polymarket.

The outcome of Utah’s legal battle could establish precedent for how other states approach these platforms. “What’s at stake here is whether states will be able to regulate gambling or if gambling is going to be subsumed into finance and ultimately regulated by Congress,” explained Todd Phillips, a Georgia State University professor specializing in prediction market regulation.

Both Kalshi and Polymarket allow users to buy and sell contracts based on event probabilities, with prices typically ranging from one cent to 99 cents, reflecting the percentage of users who believe an event will occur. The companies argue they provide risk management tools similar to traditional futures markets, where farmers might lock in crop prices in advance.

However, a significant portion of their business involves sports betting. Kalshi reported over $1 billion in trading volume on the Super Bowl alone, while roughly half of Polymarket’s activity is sports-related.

Utah’s proposed legislation specifically targets proposition betting on sports, which allows wagers on specific events within games rather than final outcomes. The bill would also affect major sportsbook companies like FanDuel and DraftKings that have developed their own prediction markets, potentially circumventing state gambling restrictions.

Anticipating Utah’s actions, Kalshi filed a preemptive lawsuit in February, requesting a judicial block on the state’s enforcement of gambling restrictions against the platform. The federal court has yet to rule on this request, though similar cases in other states have produced mixed results, with Nevada and Massachusetts courts favoring state bans while New Jersey and Tennessee courts have ruled in Kalshi’s favor.

Kalshi maintains that its product differs fundamentally from traditional gambling operations because users bet against each other rather than against the “house.” The CFTC, under Trump-appointed leadership, has supported this position, asserting exclusive regulatory oversight of prediction markets.

“To those who seek to challenge our authority in this space, let me be clear, we will see you in court,” CFTC Chairman Michael Selig stated in a recent social media post.

Utah’s stance represents a rare conflict between Governor Cox and Trump, following a period in which the governor had worked to improve his relationship with the former president after not supporting him in previous elections.

Patrick Mason, chair of Mormon history and culture at Utah State University, notes that the state’s opposition to prediction markets aligns with deeply held religious convictions. In Utah, where approximately half the 3.5 million residents are Latter-day Saints, even church bingo games rarely involve monetary stakes.

Church doctrine explicitly prohibits gambling, describing it as motivated by “a desire to get something for nothing” and destructive to families. This moral position often transcends political considerations for Utah’s leadership, nearly all of whom are church members.

On the federal level, Utah Representative Blake Moore has partnered with Democratic Representative Salud Carbajal of California to introduce bipartisan legislation for stricter regulation of prediction markets. Their bill would prohibit wagers on war, assassinations, terrorist attacks, or election outcomes, while preserving states’ rights to ban sports-related betting.

“We, as a society, should not be taking bets on whether we are going to invade Cuba,” Moore emphasized.

Despite Kalshi’s arguments about the economic utility of prediction markets for risk management by businesses like insurance companies and hotels, Moore remains unconvinced. “Utah’s economic outlook has been strong for many years,” he said. “I see no need why we need to embrace these as an economic tool.”