Key Highlights
- Arizona’s Attorney General Kris Mayes filed 20 criminal charges against Kalshi over illegal gambling and election betting.
- Authorities allege the platform allowed people in Arizona to place bets on sports games and elections.
- Kalshi claims its platform is a prediction market regulated by the CFTC, but Arizona says it broke state law.
Arizona’s Attorney General Kris Mayes is taking KalshiEx LLC and Kalshi Trading LLC, the companies behind the prediction markets platform Kalshi, to court.
According to the filing, the state said Kalshi ran an illegal gambling business in Arizona and let people place bets on elections, which is not allowed under Arizona law. This is the first time any state has taken criminal action against Kalshi.
About 20 counts of alleged violation
The complaint filed in Maricopa County Superior Court includes 20 counts. Arizona prosecutors said Kalshi accepted wagers from residents on professional and college sports games, individual player performance bets, and whether the SAVE Act would become law.
Four of the charges involve election betting, including the 2028 presidential election, the 2026 Arizona governor’s race, the 2026 Republican primary for governor, and the 2026 secretary of state race. Arizona law bans unlicensed gambling businesses and stops anyone from betting on elections.
“Kalshi may call itself a ‘prediction market,’ but in reality, it is running an illegal gambling operation and taking bets on Arizona elections, both of which violate Arizona law,” Mayes said. “No company gets to decide for itself which laws to follow.”
Kalshi’s response
In response, Kalshi said the charges are “paper-thin” and that its business is different from regular sportsbooks or casinos.
The company also said its contracts operate under the rules of the Commodity Futures Trading Commission (CFTC), which has defended the company in earlier fights with states. Kalshi added that Arizona and other states cannot control a nationwide financial exchange on their own.
Meanwhile, Kalshi filed a lawsuit against Arizona on March 12 before the criminal charges were announced, according to Mayes’s website, as well as similar actions involving Iowa and Utah.
Mayes criticized this approach, saying, “Rather than work within the legal frameworks that states like Arizona have established, Kalshi is running to federal court to try to avoid accountability.”
A federal judge in Ohio recently rejected a similar attempt by the prediction firm. The judge said the state’s interest in enforcing its laws and protecting the public was more important than the company’s convenience. Mayes added that Arizona will not allow any company to act above the state law.
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