Arizona Attorney General Kris Mayes says her office has filed gambling and related criminal charges against the companies that operate prediction-market platform Kalshi. The complaint alleges Kalshi ran an unlicensed gambling business in Arizona and accepted wagers on election outcomes in violation of state law. State officials say the platform enabled Arizona residents to place bets on contracts tied to sports events as well as state and federal elections.
Mayes characterized Kalshi as a company that markets itself as a prediction market but, in her view, is operating an illegal gambling enterprise and taking bets on Arizona elections that contravene state statutes. Her office says the charges follow Kalshi’s decision to sue Arizona preemptively, a move she called an attempt to avoid accountability under state law. Arizona is not alone in pressing cases against prediction markets; authorities have pursued similar actions against other platforms such as Polymarket.
Kalshi has countered that states are attempting to regulate a nationwide financial exchange and that federal law and agencies, not a patchwork of state rules, should govern the platform. A company spokesperson told reporters Kalshi differs from traditional sportsbooks and casinos and argued it falls under federal jurisdiction.
Recent court decisions have been divided. An Ohio judge last week denied Kalshi’s motion for a preliminary injunction, finding the company did not show its sports-event contracts fall exclusively under the Commodity Futures Trading Commission’s jurisdiction. By contrast, a federal judge in Tennessee in February barred state authorities from enforcing gambling laws against Kalshi in that case.
At the federal level the CFTC, led by Chair Michael S. Selig, has publicly defended prediction market platforms and indicated a willingness to shield them from state-level enforcement. Selig has also opened a proposed rule for public comment to clarify how the Commodity Exchange Act should apply to prediction markets, a process that could materially influence how these platforms are regulated and whether states can bring enforcement actions against them.