You may have noticed the commercials during your favorite sporting events. A company called Kalshi is urging you to gamble on an endless array of things, especially sports-related events, using a motto such as “Kalshi. The world’s gone mad, trade it.”
I hope Utah lawmakers have seen these. The real message is, “We don’t care about your state laws against gambling.”
I’ve written through the years about the challenges of remaining a gambling-free state in the middle of a virtual sea of states that allow it. Now there is a tidal wave of the stuff pouring over Utah.
What can state officials do about it?
States’ rights
This isn’t just a question about gambling, although that’s certainly front and center. It’s a question of states’ rights. If the states really are 50 separate laboratories of democracy, and if Utah believes its people are better protected from a host of social ills and addictions if it strictly resists the tide of legal gambling, shouldn’t it have the right to do that through its representative form of government?
Nevada, of all places, is lighting the way here. It sent Kalshi a cease-and-desist order last March, complaining that Kalshi needed to follow the state’s licensing procedure for all gambling concerns.
U.S. District Judge for Nevada Andrew Gordon sided with the state a few weeks ago, ruling Kalshi has to submit to state gambling regulations. Kalshi has announced its intentions to appeal. If the ruling is upheld, it may set a precedent that allows Utah the freedom it needs to keep gambling away from the state’s borders.
How has Kalshi been able to flout Utah law?
It argues that it is a financial exchange regulated solely by the U.S. Commodity Futures Trading Commission, not by any other federal or state laws. It claims to offer “swaps,” in which users freely trade contracts with one another. You may, in effect, buy a contract, not place a bet, that says the Jazz will win their next game. Kalshi profits from transaction fees, not from the losses of its users, which distinguishes it from a sports book or casino.
Using Kalshi, you can bet on predictions, such as the outcomes of elections. However, the National Law Review says sports betting is now believed to make up 90% of the company’s volume.
If anyone doubts the wisdom of anti-gambling laws, they should consider what Pope Leo XIV had to say in a recent speech to Italian mayors and local authorities. Gambling destroys families, he said. Battling against it fits in with the need to listen to the weak and the poor.
“Statistics show a major increase in (gambling in) Italy in recent years,” the Pope said, according to the Vatican News. He quoted from a recent report calling gambling a serious problem for education, mental health and societal trust.
Academic studies on gambling
That isn’t just an opinion. As I’ve written before, a growing body of academic studies illustrate the harmful effects of modern gambling.
Timothy Fong of UCLA’s gambling studies program told the Harvard Gazette that today’s gambling is different from that of the past, because of the internet. It is, he said, “not only endemic … it has changed the fabric of our bodies and our minds.”
The Lancet Public Health Commission on gambling has published a report that said in part, “The harms associated with gambling are wide-ranging, affecting not only an individual’s health and wellbeing, but also their wealth and relationships, families and communities, and deepening health and societal inequalities.” It called on governments and policymakers to treat gambling as a public health problem.
It’s also bad for the health of sports, themselves, as gambling scandals involving athletes seem to be proliferating.
Nevada isn’t the only state taking legal action. Attorneys for Massachusetts have argued that Kalshi can’t take bets without a state license, arguing that the company accepts bets from people as young as 18.
Reuters quoted Assistant Attorney General Louisa Castrucci saying, “A sports wager by any other name is still a sports wager.”
Utah in the fight
The Beehive State isn’t totally on the sidelines. Utah Attorney General Derek Brown is one of 36 attorneys general who have signed on to a case asking the U.S. Court of Appeals for the Third Circuit to side with New Jersey in a lawsuit brought by Kalshi, according to the Ohio attorney general’s office.
Utah lawmakers, who have not shied away from bills -- even message bills -- in the past, may want to consider one in this case just to let Utahns know they don’t intend to give up easily in the fight against gambling.