Utah advances HB243 gambling bill to block Kalshi and Polymarket, creating legal conflict with CFTC over prediction market regulation in the United States.
Utah is moving to block prediction market platforms Kalshi and Polymarket with a new gambling law. The decision adds to the conflict between state regulators and federal authorities for rules in the marketplace. Lawmakers say the bill will protect users, while companies have argued that the platforms are subject to financial regulations at the federal level.
Utah Bill Targets Prediction Markets as Gambling Activity
Utah lawmakers passed HB243, otherwise known as the Gambling Revisions bill, during the 2026 session. The House passed the bill on Feb. 10 and the Senate cleared it on Feb. 27. After this, the proposal was sent for a final approval to Governor Spencer Cox. Officials hope that the governor will soon sign the bill.
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The bill extends the definition of gambling in the state to include proposition betting on events. Proposition bets are bets on specific actions rather than end game results. For example, bets can follow player performance or team statistics in matches. Lawmakers said these contracts resemble sports betting activities.
Governor Spencer Cox was a huge proponent of the bill when discussing the growth of online betting. He said prediction platforms put access to gambling in every person’s pocket through phones. Young people are often the primary targets of these services, he also said. Therefore, the state wants some strict rules to mitigate future problems.
Utah officials also believe the new law will close regulatory gaps in the digital betting markets. Regulators complained that some of these platforms label wagers as trades to circumvent gambling laws. However, the state said the economic outcome is the same for users. As a result of this view, lawmakers decided to treat those markets as gambling.
Legal Fight Grows Between State Regulators and Federal Authorities
The new law set Utah officials directly against federal regulators. Kalshi has filed a lawsuit in federal court prior to the bill being enacted into law. The company said it operates under federal approval as a derivatives exchange. Therefore, it states that the state cannot prohibit its services on a legal basis.
The Commodity Futures Trading Commission backs Kalshi in the dispute with the state of Utah. Federal law gives it authority over financial prediction markets, the agency said. Officials warned states cannot control platforms that are subject to federal regulation. Due to this position, the case may become an important national law test.
At the same time, federal lawmakers are also discussing new rules for prediction markets as well. Representative Blake Moore introduced a bipartisan proposal to regulate these platforms at the federal level nationwide. The proposal calls for restrictions on contracts related to war, elections or violent events.
If Governor Cox signed HB243, prediction platforms may lose access to Utah users. The law would halt the sports-related contracts even if companies refer to them as financial trades. Several states including Ohio and Nevada are considering doing the same now. As a result, there is increasing pressure throughout the United States across the industry.
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