Arizona's attorney general, Kris Mayes, has filed criminal charges against Kalshi, accusing the prediction markets platform of operating an illegal gambling business and unlawfully allowing bets on elections. The charges, filed on Tuesday in Maricopa County Superior Court, mark the first time a US state has pursued a criminal case against the New York-based company.
The 20-count criminal information alleges that Kalshi violated Arizona law by accepting bets from residents on professional and college sports, as well as on the 2028 presidential race, the 2026 Arizona gubernatorial race, the 2026 Arizona Republican gubernatorial primary, and the 2026 Arizona secretary of state race. Mayes stated, 'Kalshi may brand itself as a prediction market, but what it’s actually doing is running an illegal gambling operation.'
Kalshi dismissed the case as 'paper-thin', arguing that its business differs from sportsbooks and casinos and should be regulated federally, not by a 'patchwork of inconsistent state laws'. The company contends that its 'events contracts' fall under the exclusive jurisdiction of the Commodity Futures Trading Commission (CFTC), which under Donald Trump has defended such platforms against state claims of unlicensed gambling.
The case highlights an escalating battle between state gaming regulators and prediction market operators over who has authority to police these platforms. Kalshi has previously argued that state-level regulation would fragment the market and hinder its operations.
