Fanatics Markets will halt Utah trades as prediction-market dispute widens

Fanatics Markets will stop accepting new trades from customers in Utah on Nov. 4, becoming the latest prediction-market operator to restrict its service in the state amid an escalating dispute over whether such contracts constitute illegal gambling.

The company said the decision was prompted by “recent developments.” Fanatics Markets is the trade name of Morton St. Trading Investments, a Commodity Futures Trading Commission-registered futures commission merchant; it offers contracts through Crypto.com | Derivatives North America under Nadex rules.

The withdrawal followed Utah’s Oct. 28 criminal case against Kalshi and its co-founders, Tarek Mansour and Luana Lopes Lara, as we reported last week. Attorney General Derek Brown brought 14 charges, including 13 felonies, alleging illegal promotion of online gambling after an undercover state investigator opened a Kalshi account and placed 12 sports contracts in September.

Utah had already sued KalshiEX and related entities in civil court on Oct. 20, seeking to stop the company from offering bets to residents. The state alleges that contracts on sports, elections, politics and other outcomes violate Utah gambling law, which the state constitution bars the Legislature from authorising.

Kalshi has argued that its market falls under exclusive federal jurisdiction. But U.S. District Judge Robert Shelby ruled in August that federal law did not override Utah’s gambling laws, and the Tenth Circuit denied Kalshi’s request to halt enforcement pending appeal on Sept. 8. Kalshi, its chief executive and chief operating officer are due to appear before a judge in Salt Lake City’s 3rd District Court in December.

Other platforms have narrowed their Utah offerings rather than fully exiting. DraftKings Predictions and FanDuel Predicts removed sports, political and novelty contracts while retaining financial or economic products, and existing affected positions remain open for settlement; PrizePicks disabled its Team Picks and Culture Picks; and Robinhood began restricting new positions in sports, culture, elections and politics on Nov. 2 while retaining finance and economics categories.

The distinctions reflect the scope of the state’s enforcement campaign, which has focused chiefly on sports and political contracts while also seeking restrictions on cultural and other markets. Brown said Utah would continue enforcing its gambling laws against companies that offered gambling in the state.