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SALT LAKE CITY — <\/span>For more than a century, Utah has kept gambling almost entirely out of the state. There are no casinos, no lotteries and no racetracks that allow bets, a prohibition rooted in the conservative ideals of The Church of Jesus Christ of Latter-day Saints, which views gambling as a vice that leads to selfishness and addiction.<\/p>\n But now, the state is fighting a new, more challenging battle to keep gambling outside its borders. It’s on the verge of enacting a law intended to undercut prediction markets<\/a> like Kalshi and Polymarket, which allow anyone with a smartphone to wager on anything from whether it will rain in Los Angeles to whether the United States will go to war. <\/p>\n While regulators and other states are still debating whether those markets constitute finance or gambling, Utah has already made up its mind.<\/p>\n \u201cWe are putting a casino in the pocket of every single American, and they are targeting especially young people,\u201d said Gov. Spencer Cox. \u201cIt is really awful what they are doing, and we are going to make sure this doesn\u2019t happen in our state.\u201d<\/p>\n Cox said he will sign the legislation, putting conservative Utah at odds with the federal government<\/a>. Kalshi has already sued the state, and the company is backed by the Commodity Futures Trading Commission, the federal agency responsible for regulating financial markets.<\/p>\n The conflict puts Utah, a place that\u2019s not known for picking fights, on the frontlines of a cultural, political and economic battle sweeping the country. On one side is a state heavily influenced by what is widely known as the Mormon<\/a> church, where both politicians and faith leaders have treated the issue as a moral crusade. On the other is a growing industry \u2014 Kalshi and Polymarket are estimated to be worth $20 billion each after their last fundraising rounds \u2014 with connections in Washington that may offer some regulatory protection. <\/p>\n President Donald Trump’s eldest son is an adviser for both Kalshi and Polymarket and an investor in the latter. Trump\u2019s social media platform Truth Social is also launching its own cryptocurrency-based prediction market called Truth Predict.<\/p>\n Whoever wins this round could shape how other states handle the issue in the future. <\/p>\n \u201cWhat\u2019s at stake here is whether states will be able to regulate gambling or if gambling is going to be subsumed into finance and ultimately regulated by Congress,” said Todd Phillips, a professor at Georgia State University who has written extensively on the issue of regulating prediction markets.<\/p>\n Polymarket and Kalshi allow participants to buy and sell contracts tied to the probable outcome of an event. Contracts are typically priced between one cent and 99 cents, which roughly translates to the percentage of customers who believe that event will happen.<\/p>\n The companies argue they offer products that allow customers to manage risk, like how farmers can buy corn futures to lock in the price of their crops ahead of time. And derivative markets like the Chicago Board of Trade and Chicago Mercantile Exchange have long offered what are known as binary options to investors, which bet on whether an event will or will not happen.<\/p>\n But unlike those derivative markets, the bulk of Kalshi\u2019s trading volume and roughly half of Polymarket\u2019s are now tied to sports<\/a>. Kalshi said it saw more than $1 billion in volume traded on the Super Bowl alone.<\/p>\n Utah is seeking to limit prediction markets from doing business in the state by taking aim at proposition betting in sports, which can be a significant source of their revenue. <\/p>\n The bill that Cox plans to sign would expand the state’s gambling ban to include wagers on certain events happening in a game rather than the game’s outcome. An example of these \u201cprop bets\u201d would be how well a particular player performs, or a team hitting a specific threshold like rebounds or other metrics.<\/p>\n The legislation also aims to stop sportsbooks companies like FanDuel and DraftKings that have set up their own prediction markets, which analysts say could allow the companies to get around state gambling prohibitions. <\/p>\n Because of the vocal opposition of Utah officials, Kalshi preemptively sued the state in late February, asking a judge to stop Utah from enforcing its gambling restrictions on the platform. A federal judge has yet to rule on Kalshi\u2019s request. Other judges in Nevada and Massachusetts have issued early rulings in favor of states looking to ban Kalshi and Polymarket from offering sports betting in their states, while judges in New Jersey in Tennessee have ruled in favor of Kalshi.<\/p>\n Kalshi argues its product is different from sportsbooks companies or casinos because customers are betting against each other instead of against the \u201chouse,\u201d spokesperson Elisabeth Diana said.<\/p>\n The Commodity Futures Trading Commission under Trump has agreed with Kalshi and has asserted that it has exclusive regulatory oversight of prediction markets. The agency argues states cannot ban the products from operating in their jurisdiction just because they are morally opposed to them.<\/p>\n \u201cTo those who seek to challenge our authority in this space, let me be clear, we will see you in court,\u201d chairman Michael Selig said recently in a video posted to social media. <\/p>\n