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Arizona’s attorney general on Tuesday filed criminal charges against Kalshi, accusing the prediction markets platform of operating an illegal gambling business in the state and unlawfully allowing people to place bets on elections.
The charges filed by Kris Mayes, the Arizona attorney general, marked the first time a state has pursued a criminal case against Kalshi, which has been at the center of an escalating battle over the ability of state gaming regulators to police prediction markets operators.
“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 in a statement.
Kalshi, which is New York-based, in a statement lamented that “a state can file criminal charges on paper-thin arguments”. It said its business was different from sportsbooks and casinos and “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.
Companies such as Kalshi offer their users the ability to place financial bets on the outcome of a wide range of events including sports and elections through the trading of so-called “events contracts”.
Kalshi has argued that such contracts are subject to the exclusive jurisdiction of the Commodity Futures Trading Commission, which under Donald Trump has come to their defense in litigation by states that argue they are operating unlicensed gaming enterprises.
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.