Arizona charges Kalshi, alleging illegal gambling with election bets | Business
Arizona’s attorney general filed criminal charges against Kalshi on Tuesday, accusing the prediction markets platform of operating an illegal gaming business in the state and illegally allowing people to bet on the election.
The charges brought by Kris Mayes, Arizona’s attorney general, marked the first time a state has taken criminal action against Kalshi, who has been at the center of a growing battle over the ability of state gambling regulators to police operators of prediction markets.
“Kalshi may present itself as a ‘prediction market,’ but what it is really doing is running an illegal gambling operation and taking bets on the Arizona election, both of which violate Arizona law,” Mayes said in a statement.
Kalshi, based in New York, lamented in a statement that “a state can file criminal charges based on paper-thin arguments.” He said his business was different from sports betting and casinos and “should not be overseen by a patchwork of inconsistent national laws.”
“States like Arizona want to individually regulate financial trading nationwide and are trying every trick they can to do so,” the company said.
Companies such as Kalshi offer their users the ability to place financial bets on the outcomes of a wide range of events, including sports and elections, through the negotiation of so-called “event contracts”.
Kalshi argued that such contracts are subject to the exclusive jurisdiction of the Commodity Futures Trading Commission, which, under the leadership of Donald Trump, has defended them in litigation brought by states that claimed to operate unlicensed gaming businesses.
Mayes’ office, in a 20-count criminal information filed in Maricopa County Superior Court, alleged that Kalshi violated Arizona law by accepting bets from residents on events including professional and college sports.
Prosecutors also alleged that Kalshi illegally accepted bets on the 2028 presidential race, the 2026 Arizona gubernatorial race, the 2026 Arizona Republican gubernatorial primary and the 2026 Arizona secretary of state race.
