Arizona sues prediction platform Kalshi for alleged illegal gambling, escalating state-level regulatory conflict.

Arizona Attorney General Kris Mayes filed criminal charges on Tuesday against the prediction market platform Kalshi, accusing it of providing illegal betting services within the state, including allowing users to bet on sports events and election results. In a statement, Mayes said that while Kalshi positions itself as a "prediction market," it is actually operating an illegal gambling business and allowing users to bet on Arizona elections, violating local laws. "No company can decide for itself which laws to comply with," he stated. The prosecution documents show that Kalshi faces a total of 20 criminal charges, including allowing Arizona residents to bet on various events such as professional and college sports, player performance betting, and election results. The charges also include four election betting-related offenses involving the 2028 U.S. presidential election, the 2026 Arizona gubernatorial election, the 2026 Republican gubernatorial primary, and the 2026 secretary of state election. Kalshi stated that the charges are "seriously flawed" and called the attorney general's actions "political." The platform has long argued that its event contracts fall under the purview of the Commodity Exchange Act and should be regulated by the Commodity Futures Trading Commission (CFTC), with federal regulation taking precedence over state law. Currently, Kalshi faces similar regulatory challenges in several states, including Ohio and Tennessee, and the legal debate surrounding whether prediction markets constitute gambling is escalating.