Tarek Mansour, co-founder and CEO of prediction markets platform Kalshi, rejected criminal charges filed this week by Arizona authorities, calling the action a “total overstep” and insisting the dispute “is not about gambling.” Arizona Attorney General Kris Mayes announced charges accusing Kalshi of operating an unlicensed gambling business in the state and offering unlawful election wagers.
Mansour told Bloomberg he believes Mayes attempted to “subvert the judicial process” by bringing criminal charges after Kalshi had already filed its own lawsuit against the state. He added the company intends to contest the case in court but will “abide by court decisions” as the legal proceedings move forward.
The Arizona indictment stands out because it is among the first state efforts to pursue criminal penalties against a prediction-market firm; Kalshi and similar platforms have faced growing scrutiny from regulators and lawmakers. Kalshi has also encountered enforcement actions from gaming regulators in other states amid allegations the platform allowed unlicensed sports wagers for residents. Separate prediction markets, such as Polymarket, have drawn attention for listing contracts tied to U.S. military actions and other sensitive topics, prompting broader debate about regulation.
In its litigation, Kalshi argues that the U.S. Commodity Futures Trading Commission (CFTC) has exclusive authority to oversee its markets, and therefore state regulators lack jurisdiction. CFTC Chair Michael Selig, recently confirmed by the Senate, signaled support for that view on X, characterizing Arizona’s prosecution as a jurisdictional dispute and saying it was “entirely inappropriate as a criminal prosecution.” Selig added that the CFTC is monitoring the situation.
Courts have reached differing conclusions so far: an Ohio judge rejected Kalshi’s request for a preliminary injunction based on the CFTC-jurisdiction argument, while a Tennessee court in February barred state officials from enforcing gambling laws against the company.
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