Arizona Attorney General Files Criminal Charges Against Kalshi for Alleged Illegal Gambling
Arizona's Attorney General has filed criminal charges against Kalshi, accusing the platform of operating an illegal gambling business by allowing bets on elections.
Arizona Attorney General Kris Mayes has filed criminal charges against New York-based prediction market platform Kalshi, alleging the company operated an illegal gambling business by permitting bets on elections within the state. This marks the first instance of a state pursuing criminal action against Kalshi, highlighting the ongoing debate over state authority to regulate prediction markets.
"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 stated.
In response, Kalshi criticized the charges, describing them as "paper-thin" and asserting that its operations differ from traditional sportsbooks and casinos. The company argued that it should not be subject to a "patchwork of inconsistent state laws."
Kalshi offers users the ability to place financial bets on various events, including sports and elections, through trading "event contracts." The company contends that these contracts fall under the exclusive jurisdiction of the Commodity Futures Trading Commission (CFTC). However, the CFTC has previously determined that such contracts involve "gaming" and are subject to state laws prohibiting betting on elections.
The 20-count criminal information filed in Maricopa County Superior Court alleges that Kalshi violated Arizona law by accepting bets from residents on events such as professional and college sports, as well as the 2028 presidential race, the 2026 Arizona gubernatorial race, the 2026 Arizona Republican gubernatorial primary, and the 2026 Arizona secretary of state race.