Arizona Charges Kalshi With Illegal Gambling Operation

Arizona’s Attorney General has filed criminal charges against Kalshi, a prediction markets platform, alleging it operates an illegal gambling business within the state. This marks the first time a state has pursued a criminal case against the company. The charges accuse Kalshi of unlawfully allowing bets on elections, including the 2028 presidential race and several Arizona gubernatorial and secretary of state races. Prosecutors also allege violations of state law regarding bets on professional and college sports. Kalshi responded, calling the case “paper-thin” and arguing it should not be subject to “inconsistent state laws.” The company maintains its operations differ from traditional sportsbooks and casinos and fall under the jurisdiction of the Commodity Futures Trading Commission. Attorney General Kris Mayes stated Kalshi is “running an illegal gambling operation” despite branding itself as a “prediction market.” The case escalates a growing legal battle between states seeking to regulate prediction markets and companies like Kalshi challenging that authority.