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Arizona Attorney General Kris Mayes on Tuesday announced the state has filed 20 misdemeanor charges against the prediction market Kalshi, accusing it of operating an illegal gambling business in Arizona without a license as well as for election wagering.
The case is sending shock waves across the gambling sphere on Tuesday.
"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," said Mayes. "No company gets to decide for itself which laws to follow."
The 20-count criminal information alleges that Kalshi accepted bets from Arizona residents on a wide range of events in violation of Arizona law. These events included professional and college sporting contests, proposition bets on individual player performance, and whether the SAVE Act would become law. Among the charges are four counts of election wagering, including 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.
Arizona law prohibits operating an unlicensed wagering business, and separately bans betting on elections outright.
Kalshi claims it does not offer a gambling product but instead provides a regulated financial exchange for trading on event outcomes. The company is also licensed by the Commodity Futures Trading Commission (CFTC) as a Designated Contract Market (DCM).
“Kalshi is not a gambling site… It’s a marketplace,' argues Kalshi CEO Tarek Mansour. Unlike a traditional gambling site, “prediction markets don’t make money off somebody’s losses," Mansour says.
The current Commodity Futures Trading Commission chair, Michael S. Selig has vowed to take on US states that try to prevent prediction markets from operating in their respective jurisdictions.
“Event contracts allow businesses and individuals to hedge event-driven risks, enable investors to manage portfolio exposure, and provide the public with information about the outcome of future events," Selig stated.
“To those seeking to challenge the Commission’s jurisdiction over these contracts… we’ll see you in court," he added.
Last Thursday, March 12, Kalshi sued the State of Arizona preemptively in an attempt to avoid accountability under Arizona law.
"Kalshi is making a habit of suing states rather than following their laws. In the last three weeks alone, the company has filed lawsuits against Iowa and Utah, and now Arizona," said Mayes. "Rather than work within the legal frameworks that states like Arizona have established, Kalshi is running to federal court to try to avoid accountability."
Kalshi previously sued the state of Utah preemptively, including the Governor and Attorney General.
Renowned gambling attorney Daniel Wallach offered his opinion on Tuesday's shock news.
"These are the first criminal charges filed against Kalshi in any court in the United States. Raises the stakes considerably on both Kalshi’s motion for preliminary injunction filed in AZ federal court yesterday and on the upcoming CA9 oral argument."
This story is fluid. Gambling911.com will continue to monitor for additional developments.
- Chris Costigan, Gambling911.com Publisher
