Utah filed criminal charges on Wednesday against the prediction market Kalshi and its two co-founders, the Associated Press and Utah radio station KUER report. The AP story ran in The Guardian. Ars Technica reports the federal government is suing Utah to stop it from enforcing its gambling ban against the company.

The charges include 13 counts of breaking Utah's ban on gambling and one count of profiting from illegal activity, the AP reports. The AP and KUER report the charges name Kalshi, its chief executive Tarek Mansour and its chief operating officer Luana Lopes Lara. The felony charges could bring jail time, though the attorney general's office has not said what penalties it will seek.

"Calling it a 'prediction market' doesn't change what it is, and being federally registered doesn't put a company above the law," Utah Attorney General Derek Brown said.

Kalshi called the charges a "crazy overreach" and said "Utah is clearly playing politics." It said it expects to stop the case in court, "just like we did in Arizona."

Utah is one of only two states that ban gambling in its constitution, Ars Technica reports. The state sued Kalshi in a state court last week, seeking to stop it from offering bets on sports, elections and other events. Kalshi lost an earlier federal case it brought to block Utah from enforcing its laws.

The US Commodity Futures Trading Commission, which regulates prediction markets, has now sued Utah, Ars Technica reports. The agency says federal law overrides state rules for registered exchanges. Utah is the 10th state the agency has sued.

Kalshi says prediction markets fall only under federal law. Legal fights have spread to about 20 states, and analysts expect the US Supreme Court to settle the issue, the AP reports.

What we know: Utah has filed criminal charges against Kalshi and its co-founders, and a federal regulator is suing the state.
What we don't: What penalties Utah will seek, and how the courts will rule.