Arizona has filed criminal misdemeanor charges against prediction market platform Kalshi, accusing it of operating an illegal gambling business and unlawfully allowing bets on elections, in what marks the first such case brought by a U.S. state.
The charges were filed by Arizona Attorney General Kris Mayes in a 20-count criminal information in Maricopa County Superior Court, alleging the New York-based company accepted bets from Arizona residents on a range of events, including sports and political races.
Prosecutors said Kalshi allowed wagers on professional and college sports as well as elections, including the 2028 U.S. presidential race and multiple Arizona contests scheduled for 2026, such as the Arizona gubernatorial race, the Republican primary, and the secretary of state race.
“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 said.
The case underscores a growing legal battle between state regulators and companies offering prediction market products, which allow users to trade contracts tied to the outcomes of real-world events.
Kalshi has argued that its event contracts fall under the exclusive jurisdiction of the Commodity Futures Trading Commission, rather than state gambling laws. The regulator, under President Donald Trump, has supported prediction markets in disputes with states that contend such platforms amount to unlicensed gambling.
In response to the charges, Kalshi lamented that “a state can file criminal charges on paper-thin arguments,” adding that its platform “should not be overseen by a patchwork of inconsistent state laws.”
“States like Arizona want to individually regulate a nationwide financial exchange, and are trying every trick in the book to do it,” the company said.
Kalshi had sought to block Arizona’s action by filing a lawsuit in federal court, but U.S. District Judge Michael Liburdi denied its request for a temporary restraining order.
No other state has filed criminal charges against the company. However, Massachusetts, Nevada, and Michigan have pursued civil actions to prevent Kalshi from offering sports event contracts. A Massachusetts judge has issued an injunction blocking such offerings, though the ruling is currently on hold pending appeal.
Original article: https://www.yogonet.com/international/news/2026/03/18/118131-arizona-files-criminal-charges-against-kalshi-over-alleged-illegal-gambling-operations
