The US state of Utah is set to block prediction marketplace platforms such as Kalshi and Polymarket, intensifying a growing dispute between state regulators and federal authorities over how to regulate the industry.
Wednesday in Utah HB243 The (Gambling Revisions) bill was sent to the Governor’s desk after passing the Utah House on February 10 and approval by the Senate on February 27. The Act defines “betting on the basis of proposals” as gambling. Proposition bets are bets on specific events in a match, such as a specific athlete’s performance or a team achieving certain statistics, rather than the final outcome of the match itself.
The regulations aim to prevent companies from offering sports-related predictions or sports betting in Utah, including through platforms that describe themselves as prediction markets rather than sportsbooks.
Gov. Spencer Cox said he plans to sign the bill into law According to – according to Thursday’s Associated Press report. “We are putting a casino in the pocket of every American, and our focus is especially on youth,” Cox reportedly said. “It’s truly terrible what they’re doing and we’re going to make sure something like this doesn’t happen in our state,” he added.
Related: Kalshi suffers legal defeat in Ohio over sports betting lawsuit
Kalshi is suing Utah after the bill passed the Senate
In February, Kalshi defendant Utah, asking a federal judge to block the state from enforcing gambling restrictions on the platform following the unanimous approval of HB243 by the Utah Senate Business and Labor Committee.
Kalshi argued that event contracts are federally regulated derivatives, not gambling. The company said the Commodity Futures Trading Commission (CFTC) has exclusive authority over these markets under the Commodity Exchange Act, which means states like Utah cannot ban them.
On Wednesday, Kalshi also sued the state of Iowa, claiming she did so because of the risk of impending foreclosure proceedings. The decision comes after a federal judge in Ohio on Monday rejected Kalshi’s request to block state regulators from enforcing gaming laws on sports event contracts.
Related: Kalshi sued over ‘death cut’ in Khamenei’s prediction market
The CFTC claims authority over prediction markets
The CFTC has asserted that it exercises regulatory authority over prediction markets. “For those who seek to challenge our authority in this space, let me be clear: I will see you in court” – Chairman Michael Selig he said Lately.
Speaking at an industry conference in Florida on Monday, Selig also said prediction markets can serve as powerful tools for discovering information about future events. He described well-functioning prediction markets as “truth machines”, arguing that when participants back their views with money, markets can generate crystal clear and reliable signals that can be more reliable than classic polls.
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