Arizona Files Criminal Charges Against Kalshi Platform

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Arizona Attorney General Kris Mayes filed 20 criminal charges against Kalshi for alleged illegal wagering activities in the state.
The charges accuse Kalshi of operating an unlicensed gambling business and offering election betting contracts in Arizona.
State officials said Arizona law bans both unlicensed wagering operations and betting on elections outright.
Kalshi denied the allegations and said the Commodity Futures Trading Commission has exclusive jurisdiction over its event contracts.
The case adds to ongoing legal disputes between Kalshi and several states over the regulation of prediction markets.

Arizona Attorney General Kris Mayes filed criminal charges against Kalshi on Tuesday over alleged illegal wagering activities. She accused the platform of operating an unlicensed gambling business and offering election betting in Arizona. The case sets up a direct conflict between state gambling laws and federal derivatives oversight.

Arizona Alleges Illegal Election and Sports Wagering by Kalshi

Mayes charged KalshiEx LLC and Kalshi Trading LLC with 20 criminal counts under Arizona law. She alleged that the company accepted bets from Arizona residents on sports and elections. The filing cited contracts tied to the 2028 presidential race and the 2026 gubernatorial race.

Mayes said, “Arizona law prohibits operating an unlicensed wagering business, and separately bans betting on elections outright.” She argued that Kalshi violated both provisions by offering contracts to state residents. She stated that the company structured its products as prediction markets while running what she described as an illegal gambling operation.

She added, “Kalshi may brand itself as a ‘prediction market,’ but what it’s actually doing is running an illegal gambling operation.” She also said the platform took bets on Arizona elections in direct violation of state law. Therefore, her office moved forward with criminal enforcement.

Kalshi responded through a spokesperson and rejected the allegations. The spokesperson said, “Sadly, a state can file criminal charges on paper-thin arguments.” The company argued that federal regulators oversee its contracts.

The spokesperson added that the Commodity Futures Trading Commission holds exclusive jurisdiction over event contracts. The company stated that it operates as a regulated derivatives venue rather than a sportsbook. It also said state-by-state regulation would create inconsistent rules for a national exchange.

Federal Oversight Clash and Ongoing Court Battles

The charges followed recent guidance from the Commodity Futures Trading Commission under Chairman Mike Selig. The agency signaled support for prediction markets and launched a rulemaking process. It asserted “exclusive jurisdiction” over event contracts.

Kalshi has relied on that federal position in several lawsuits. The company sued Arizona on March 12 before the criminal filing. It also filed suits against Iowa and Utah in recent weeks.

Mayes criticized that strategy and said, “Kalshi is making a habit of suing states rather than following their laws.” She argued that the company sought to bypass state gambling frameworks through federal courts. Arizona officials said they will defend the state’s authority.

Courts have issued mixed rulings on prediction markets and state law. A federal judge in Nevada ruled that Kalshi’s sports contracts fall under state gaming regulators. A Massachusetts state court reached a similar conclusion on sports-related conduct.

However, a federal judge in Tennessee temporarily blocked state regulators from enforcing a cease-and-desist order. The Arizona filing also referenced a recent decision in Ohio. There, a judge denied Kalshi’s request for a preliminary injunction and affirmed the state’s authority to enforce its gambling laws.

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