The Sportsbooks Blink in Utah as Washington Asks a Judge to Halt the Kalshi Case

DraftKings, FanDuel and Fanatics have pulled sports contracts from Utah since the state charged Kalshi and its founders, and Fanatics is leaving altogether. The federal bid to stop the prosecution goes before the judge who has already ruled that Utah's gambling laws apply to Kalshi.

• DraftKings Predictions withdrew sports, novelty and political contracts in Utah on 28 October, the day the state charged Kalshi and its founders, according to trade reports
• FanDuel Predicts did the same on 30 October, and Fanatics says it will stop all trading on Fanatics Markets in Utah on 4 November
• The United States and the Commodity Futures Trading Commission (CFTC) filed an emergency motion on 29 October to halt Utah's criminal and civil cases against Kalshi
• Judge Robert J. Shelby, who ruled in August that federal law does not preempt Utah's gambling laws as applied to Kalshi, has set a status conference on the motion for 6 November
• The proposed order would protect every CFTC-regulated exchange and futures broker, not only Kalshi, and no ruling has been made

Three Sportsbook-Owned Platforms Narrow or End Their Utah Offer

DraftKings Predictions removed sports, political, novelty and certain other event contracts for customers physically located in Utah on 28 October, the day Utah filed 14 counts against KalshiEX and its co-founders Tarek Mansour and Luana Lopes Lara, according to InGame and World Casino News. "Effective immediately, sports, novelty, political, and certain other event contracts are no longer available," DraftKings said, according to World Casino News. Financial contracts on stocks, commodities and cryptocurrency remain, the reports say.

FanDuel Predicts followed at 10 a.m. ET on 30 October, according to World Casino News. A FanDuel spokesperson told InGame that customers can still "trade on economic benchmarks and key financial indicators".

Fanatics is going further. "Due to recent developments, we are stopping trade placement on Fanatics Markets in the state of Utah on November 4," a spokesperson said, according to World Casino News. InGame reports that the shutdown takes effect at 8 a.m. MT and removes the product from the state entirely, financial contracts included.

Kalshi has given no sign of following. It called the charges "a crazy overreach", and Utah's charging document alleges it kept offering contracts in the state after losing in federal court in August.

Washington Files an Emergency Motion Against the Prosecution

On 29 October the United States and the CFTC filed a motion for a temporary restraining order and preliminary injunction in United States v. State of Utah, No. 2:26-cv-01055, in the US District Court for the District of Utah. The suit against the state and Attorney General Derek Brown dates from 26 October; the exhibits are Utah's 20 October civil complaint against Kalshi and the three criminal informations against KalshiEX, Mansour and Lopes Lara.

The proposed order would find the federal government likely to show that Utah's gambling laws, as applied to event contracts on CFTC-regulated designated contract markets (DCMs), are preempted by the Commodity Exchange Act. It would bar Utah from criminal or civil enforcement over those contracts, including pending cases against DCMs, futures commission merchants and their officers, and require Utah to dismiss or stay those actions.

The case was reassigned to Judge Shelby on 28 October. His order of 30 October sets an in-person status and scheduling conference for 1 p.m. on Friday, 6 November. As of 3 November the docket shows no ruling and no response from Utah.

The Sportsbooks Have More to Lose Than Kalshi

DraftKings, FanDuel and Fanatics run licensed sportsbooks in many states, where regulators assess the suitability of licensees and executives, so a Utah criminal charge could follow them elsewhere. Kalshi has no such licence book to protect; its position rests on federal registration. Keeping only financial contracts moves DraftKings and FanDuel away from the sports wagers at the centre of the criminal case and Utah's civil suit, and Fanatics appears to have judged even that residual exposure not worth carrying. The platforms with most to lose elsewhere chose not to wait for the federal court.

The Motion Asks Judge Shelby to Reach a Different Answer

The CFTC's preemption case goes before the judge who rejected Kalshi's version of it on 4 August, a ruling the Tenth Circuit refused to suspend pending Kalshi's appeal. The proposed order asks him to find the federal side likely to succeed on the merits. The April order halting Arizona's criminal case came from a court that had not already ruled against Kalshi. Friday's hearing schedules the dispute rather than decides it, so the prosecution stands for now.

The Order Sought Reaches Well Beyond Kalshi

Because the proposed order extends to DCMs, futures commission merchants and their officers, a grant would shield federally regulated exchanges and brokers generally, not only Kalshi. Crypto.com's OG.com exchange has already sued Utah pre-emptively in the same court. Washington is defending a market structure, not one operator.

The sportsbooks have decided not to test Utah's criminal law while the federal question is open, and Kalshi has decided to test it. Friday's conference will show how fast Judge Shelby means to move, not which of them read the risk correctly.