Robinhood limits Utah event contracts after Kalshi charges

Robinhood began restricting customers physically located in Utah from opening new event-contract positions tied to sports, culture, elections and politics on Nov. 2. The company kept finance and economics contracts available to those customers.

Robinhood said it did not believe the restricted contracts violated Utah law. Its change followed Utah’s criminal case against prediction-market operator Kalshi, although Robinhood did not explicitly say the charges were the reason for its decision.

The Utah Attorney General’s Office has charged KalshiEx LLC and its co-founders, Tarek Mansour and Luana Lopes Lara, over allegations that a state undercover investigator was able to use a Utah-based account to place money on sports outcomes. The defendants face one second-degree felony count of pattern of unlawful activity, 12 third-degree felony counts of online gambling promotion and one class A misdemeanor count of general gambling promotion.

Utah maintains that gambling is illegal under both its constitution and state law, and has separately brought a civil suit seeking to stop Kalshi from offering contracts in the state. That complaint alleges that the platform made bets on sports, elections, politics and other outcomes available to Utah residents.

The dispute has also become a test of federal and state authority over prediction markets. Kalshi sued Utah officials in February, arguing that the Commodity Exchange Act barred state regulation of its platform. U.S. District Judge Robert Shelby granted summary judgment to Utah in August, and the Tenth Circuit declined on Sept. 8 to block enforcement while the appeal proceeded.

DraftKings also immediately removed sports, novelty, political and certain other event contracts for Utah customers, while continuing to offer financial contracts linked to stocks, commodities and cryptocurrency. Existing positions in the affected DraftKings markets were left open to settle normally.

Fanatics Markets separately stopped offering contracts to Utah customers on Nov. 4, as we reported. Kalshi, Mansour and Lopes Lara were ordered to appear before a judge in Salt Lake City’s 3rd District Court in December.