- Gov. Spencer Cox signed a law prohibiting prop bets in Utah.
- The new law comes amid the rise of prediction market platforms.
- A public health advocacy group sued the NFL, DraftKings and FanDuel.
Utah prohibits all forms of gambling, and a new law specifically targeting what are known as proposition bets will take effect in May.
Gov. Spencer Cox signed a bill outlawing wagers placed on specific players or events during sporting contests that are not directly connected to the outcome of a game, such as who will score the first touchdown or how many points a player will score.
Under HB243 it means “a gambling bet on an individual action, statistic, occurrence or nonoccurrence.”
“I had a company reach out to me and ask if I wanted to place a bet, whether or not this bill was going to pass,” bill sponsor Rep. Joseph Elison, R-Toquerville, said during a Utah House discussion of the measure last month. “That would be an example, colleagues, of a proposition bet.”
The law, which takes effect May 6, isn’t just aimed at online sports betting. It comes amid the rapid rise of prediction markets where users can “trade on futures” ranging from who will win the Oscars to who will win a presidential election.
Cox, Attorney General Derek Brown and other Utah leaders see the buying and selling of contracts on prediction market platforms no different than making a bet on a sportsbook app.
“Gambling has no place in Utah, and our laws should reflect that,” Cox said in a statement on the bill signing. “We’ve seen the damage this gambling technology can cause, including addiction and financial loss for individuals and families. HB243 ensures proposition bets are treated as gambling under Utah law, bringing clarity to people, communities and law enforcement.”
Kalshi, a popular prediction market platform, sued Utah last month to block the state’s efforts to ban its platform as illegal gambling. The company contends the Commodity Futures Trading Commission regulates its product, not the state. The CFTC has historically monitored futures contracts on things such as livestock, crude oil and gold and silver prices.
A recent Deseret News/Hinckley Institute of Politics poll found 50% of Utahns consider prediction markets gambling, while 30% do not and and 20% don’t know.
Prediction market companies Kalshi and Polymarket are embroiled in lawsuits in several states, all of them civil cases until Arizona filed criminal charges against Kalshi last week, accusing it of operating an illegal gambling business.
The state’s attorney general alleges the company is unlicensed and never received approval from Arizona regulators. A state gaming commission regulates sports betting and gambling on elections is illegal in Arizona.
A Kalshi spokesperson called the criminal charges “seriously flawed” and “meritless.”
Forty states and Washington D.C., have some form of legalized sports betting, whether online or in-person. Of those states, 32 offer sports betting with smartphone apps or websites.
New lawsuit targets NFL, sportsbooks
Meanwhile, the Public Health Advocacy Institute filed a civil complaint in Pennsylvania this week against traditional sportsbook apps FanDuel and DraftKings as well as the National Football League.
The product liability lawsuit, similar to successful litigation in New Mexico and Los Angeles where juries this week found Meta designed social media platforms to addict children, claims online sports betting platforms “relentlessly push addictive” live in-game microbets.
The suit contends sportsbooks use sophisticated digital technology and software — including artificial intelligence and machine learning — to create addicted gamblers.
The PHAI complaint doesn’t involve children but alleges DraftKings and FanDuel “lured” adult men Christopher Sage and Terry Thompson into making more and more microbets, which are wagers such as whether the next pitch in a baseball game will be a ball or a strike. In addition to constant “push” notifications about microbets, the online sportsbooks also assigned each a “VIP Host” who enticed them with promotional offers, trips to sporting events and other gifts on their mobile phones.
“Following in the footsteps of the tobacco industry, the online sports gambling industry has developed a highly addictive, difficult-to-resist product that bombards consumers with dozens of betting opportunities every minute of the day and that is leaving a trail of devastated victims, like our clients Chris Sage and Terry Thompson,” PHAI litigation director Andrew Rainer said in a statement.
“Instead of continuing to stuff their pockets with billions of dollars in annual revenues, the perpetrators of this devastation — DraftKings, FanDuel, Genius Sports and, tragically, the NFL — must be held to account."
Will Congress act on prediction markets?
Two Utah members of Congress, Sen. John Curtis and Rep. Blake Moore, are among several federal lawmakers that have introduced bipartisan legislation that, among other things, would prevent online prediction markets from offering contracts that look like sports betting or casino-style games.
I. Nelson Rose, an emeritus law professor at Whittier College and expert on gambling law, told the Deseret News earlier this week that he doubts Congress will take up any of those bills because of President Donald Trump’s family ties to the industry.
Trump’s son, Donald Trump Jr., has invested in Polymarket through his venture capital firm and is a strategic advisor for Kalshi.
Rose said the underlying legal issue is whether Congress intended to legalize something that looks a lot like sports betting when it passed commodities exchange laws starting in the 1930s. He said what’s happening now shows it did not.
“The problem for Kalshi and Polymarket is that they are losing public support,” he said. “The problem for the country is that Donald Trump’s family has a financial interest in Kalshi and Polymarket.”