Arizona Hits Kalshi With Criminal Charges Over ‘Illegal Gambling’
Arizona Attorney General Kris Mayes has filed criminal charges against Kalshi, accusing the company of operating an illegal gambling business in the state without a license and taking prohibited bets on elections.
The 20-count criminal information names KalshiEx LLC and Kalshi Trading LLC, the companies behind the prediction markets platform.
Arizona alleges that Kalshi accepted wagers from state residents on a wide range of events barred under state law, including professional and college sports, player proposition bets, and political outcomes.
These allegations specifically mention bets placed on the 2028 presidential race, the 2026 Arizona governor’s race, the 2026 Arizona Republican gubernatorial primary, and the 2026 Arizona secretary of state race.
The federal Commodity Futures Trading Commission regulates Kalshi and other prediction markets.
Kalshi is Gambling, Says Arizona
“Kalshi may brand itself as a ‘prediction market,’ but what it’s actually doing is running an illegal gambling operation and taking bets on Arizona elections, both of which violate Arizona law,” Mayes said in a statement. “No company gets to decide for itself which laws to follow.”
The case centers on an ongoing legal dispute over whether prediction markets fall under online gambling regulations or represent financial products.
In response, Kalshi has repeatedly argued that its contracts fall under federal commodities regulation, not state betting rules.
Mayes also criticized Kalshi’s legal strategy. On March 12, Kalshi sued Arizona in federal court, continuing a pattern that has drawn scrutiny as the company clashes with multiple states.
On March 17, an Arizona federal judge denied Kalshi’s motion for a temporary restraining order against the Arizona Attorney General and ordered Kalshi to show cause why the federal court should not “abstain” from hearing the case in light of the criminal charges.
“Kalshi is making a habit of suing states rather than following their laws,” Mayes said, noting recent cases involving Iowa, Utah, and Ohio.
Kalshi Responds to Arizona
“Sadly, a state can file charges on paper thin arguments,” Kalshi said in a statement. “As other courts have recognized and the CFTC affirms, Kalshi is subject to federal jurisdiction and it should not be overseen by a patchwork of inconsistent state laws.”
The Arizona attorney general’s office also pointed to a recent setback for Kalshi in Ohio, where a federal judge denied the company’s request for a preliminary injunction.
The court said Kalshi’s claimed business harms were outweighed by Ohio’s interest in enforcing its own laws and regulating sports gambling in the interest of public welfare.
Elsewhere, for example, in Minnesota, policymakers have introduced legislation to criminalize prediction markets like Kalshi. New York is also considering similar legislation to regulate prediction markets.
The post Arizona Hits Kalshi With Criminal Charges Over ‘Illegal Gambling’ appeared first on GamblingHarm.org.