Arizona has filed criminal charges against Kalshi, accusing the New York-based prediction markets platform of running an unlicensed gambling business and accepting bets on elections.
Attorney General Kris Mayes said the company “may brand itself as a prediction market, but it is taking illegal bets on Arizona elections,” which violates state law.
The 20-count filing in Maricopa County Superior Court claims Kalshi allowed Arizona residents to wager on professional and college sports, individual player performances, and political outcomes.
- Kalshi Taps Brazil’s XP to Take Prediction Markets Global
- ‘Khamenei Out’ Market Becomes Legal Headache for Kalshi
- DriveWealth-Kalshi Tie-Up Delivers Event Trading Inside Mainstream Investing Platforms
Gambling or Trading Products
Prosecutors cited bets on the 2028 U.S. presidential race and upcoming 2026 state elections, including the governor and secretary of state contests.
Kalshi said in a statement that Arizona’s accusations rest on “paper-thin arguments,” arguing that its platform operates as a financial exchange regulated by the U.S. Commodity Futures Trading Commission. The company added that different states should not oversee a “nationwide financial exchange.”
You may also like: Polymarket Grabs Nearly 55% of Prediction Markets as Iran Bets Test CFTC Crackdown
Arizona’s action comes amid a broader regional and national fight over how to regulate Kalshi’s event contracts, with the company now entangled in dozens of cases that pit its claim of exclusive federal oversight by the U.S. Commodity Futures Trading Commission against the authority of states to enforce their gambling laws.
In recent weeks, Kalshi has preemptively sued regulators in states including Arizona, Iowa and Utah after pushback on its sports and political markets, while several states and tribal authorities have launched their own actions to block in-state access to the platform.
Join the inaugural Finance Magnates Singapore Summit 2026, which will bring together brokers, fintechs, banks, EMIs, wealth managers, and hedge funds across APAC.
Attorney General Mayes said Kalshi has a pattern of suing states rather than complying with their wagering laws. The company recently filed cases against Iowa, Utah, and Arizona to block state enforcement.
Courts have issued mixed rulings so far: a judge in Tennessee allowed Kalshi to keep operating under a temporary stay, while decisions in states such as Maryland, Massachusetts and Ohio have backed state powers to treat the firm’s contracts as gambling products subject to local licensing rules.
States Push Back on CFTC
A federal judge in Ohio recently rejected Kalshi’s bid for an injunction, ruling that the state’s authority to regulate gambling outweighed the firm’s operational claims. The Arizona case marks the first criminal prosecution against Kalshi by a state.
The latest development comes as a defiance to a growing campaign by federal regulators to claim sole authority over prediction markets, deepening a clear split between Washington and the states. CFTC Chair Michael Selig has recently pushed a moreassertive line, directing the agency to intervene in court battles.
He insists that federal derivatives rules, not state gambling codes, should govern event contracts. He has cast the wave of state enforcement against platforms such as Kalshi, Coinbase, Crypto.com and Polymarket as part of a broader state-led offensive.
