DraftKings and FanDuel are pulling sports and several other types of prediction market contracts from Utah amid the state’s escalating legal battles with Kalshi and federal regulators.
DraftKings confirmed to Legal Sports Report Thursday that customers physically located in Utah can no longer trade sports, novelty, political and certain other event contracts through DraftKings Predictions. FanDuel will halt similar offerings Friday, a company spokesperson told LSR.
The moves follow a week of legal actions over prediction markets in Utah, including criminal charges against Kalshi and a lawsuit from the the Commodity Futures Trading Commission challenging the state’s gambling authority. Unlike New Jersey, Nevada, Ohio or many other states fighting prediction markets in court, Utah prohibits nearly all forms of gambling.
DraftKings limits Utah prediction markets
DraftKings notified customers by email that Utah has transitioned to a financial-only prediction market experience.
“Effective immediately, sports, novelty, political, and certain other event contracts are no longer available on DraftKings Predictions for customers physically located in Utah,” the company said in a statement to LSR.
Customers can still trade financial event contracts tied to stocks, commodities and cryptocurrency. Existing positions in affected markets will remain open and settle normally, according to DraftKings.
Others may follow DraftKings
FanDuel Predicts will stop offering sports, political and novelty event contracts in Utah starting Friday at 10 a.m. ET, a company spokesperson confirmed to LSR.
Customers will still be able to trade contracts tied to economic benchmarks and financial indicators, while existing positions will remain open and settle normally.
An industry source familiar with the situation told LSR that Fanatics is “working through the process in real-time.”
Fanatics Markets still lists Utah among the 22 states where customers can trade sports event contracts on its website. The company did not respond to a request for comment.
Regulatory pressure exposes industry divide
Prediction market-only operators such as Kalshi and Polymarket continue to offer sports contracts in Utah and have challenged state gambling restrictions in court, seeking to establish their right to offer federally regulated event contracts nationwide.
DraftKings, FanDuel and Fanatics meanwhile, have broken from traditional sportsbooks like BetMGM and Caesars by expanding into prediction markets, but have been more cautious about challenging state gambling laws. All three have limited sports contracts to states where they do not operate licensed sportsbooks.
Polymarket and Kalshi have halted sports contracts in states like Michigan and Nevada, though unlike some voluntary pullbacks by some sportsbooks, those restrictions followed adverse court rulings or failed appeals.
Utah escalates fight against Kalshi
Utah Attorney General Derek Brown filed 14 criminal charges Wednesday against Kalshi and co-founders Tarek Mansour and Luana Lopes Lara, accusing them of illegally promoting online gambling.
According to charging documents, an undercover state investigator opened a Kalshi account and placed 12 sports wagers in September.
“Gambling is illegal in Utah, whether you place the bet, run the game, or promote it,” Brown said in a statement. “Calling it a ‘prediction market’ doesn’t change what it is, and being federally registered doesn’t put a company above the law.”
The criminal charges followed an Oct. 20 civil lawsuit seeking to block Kalshi’s event contracts in Utah and recover profits allegedly generated through illegal gambling.
Dozens of states back Utah
Also on Wednesday, a bipartisan coalition of 37 states and Washington, D.C. filed an amicus brief urging the 10th U.S. Circuit Court of Appeals to uphold an August ruling allowing Utah to enforce its gambling laws against Kalshi.
U.S. District Judge Robert Shelby had rejected Kalshi’s argument that federal law preempts Utah’s gambling restrictions. The appeals court subsequently declined to block enforcement pending appeal.
CFTC intervenes in Utah dispute
The CFTC separately sued Utah Monday, arguing that the Commodity Exchange Act gives it exclusive jurisdiction over federally regulated event contracts, preempting state gambling restrictions.
The dispute is part of a nationwide legal battle involving more than a dozen states over whether sports event contracts fall exclusively under federal regulation or remain subject to state gambling laws.
Federal appeals courts have reached conflicting conclusions, with multiple parties urging the U.S. Supreme Court to take up the question.
