Arizona Attorney General Chris Mayes filed criminal charges against Kalshi, an election prediction market platform, for operating an illegal gambling business without a license in the state.
The Complaint No. 20The filing filed Tuesday in Maricopa County court accuses the company of engaging in unlicensed gambling, alleging the site “accepts bets from Arizona residents on a wide range of events, including state elections.” Illegal in Arizona. The complaint accused Kalshi of four counts of electioneering for taking bets from Arizona residents in the 2028 presidential race, the 2026 Arizona gubernatorial race, the 2026 Arizona Republican gubernatorial election and the 2026 Arizona secretary of state.
This is the first time that the state has brought such charges against the company. According to AZ Mirrorand marks a significant escalation in the battle between states and the prediction market industry.
“Kalshi may call himself a ‘prediction market,’ but what he’s really doing is running illegal gambling and betting on Arizona elections in violation of Arizona law.” – Attorney General Mayes said in the statement. “No company can decide for itself which laws to follow.”
Note that the charges are technically misdemeanors. They follow a small wave cease and desist letters, claimsand other official actions of the states regarding the activities of Kalshi, where there are many officials he complained the company is flouting state gambling laws.
Conversely, forecast sites like Kalshi have argued that they are not violating state laws because they are subject to federal regulations through the Commodity Futures Trading Commission.
Kalshi may be under attack left, right and center, but the company has also taken its own, often pre-emptive, legal action.
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Kalshi sued the Arizona Department of Gaming March 12 in federal court. The company claim argued that Arizona’s regulatory efforts interfered with “the federal government’s exclusive authority to regulate derivatives trading on exchanges.” Kalshi also sued recently Iowa and Utah on similar grounds.
Mayes’ office claims the company is simply trying to avoid responsibility.
“Kalshi has made a habit of suing states rather than complying with their laws. In the last three weeks alone, the company has filed lawsuits against Iowa and Utah, and now Arizona,” Mayes said in a statement. “Instead of working within the law created by states like Arizona, Kalshi is going to federal court to try to avoid liability.”
Elisabeth Diana, Kalshin’s head of communications, called the Arizona criminal charges “seriously flawed” and a matter of “gambling” related to the company’s own lawsuit against the state.
“Four days after Kalshi filed suit in federal court, these charges were filed to avoid federal court and to cut short the normal judicial process,” Diana said. “They are trying to prevent the federal courts from evaluating the case on its merits — whether Kalshi is subject to exclusive federal jurisdiction. These charges are baseless, and we look forward to fighting them in court.”
Federal officials have said they are siding with the forecasting industry, setting up a potential regulatory showdown between states and the federal bureaucracy. Michael Selig, chairman of the Commodity Futures Trading Commission, recently published and op-ed In the Wall Street Journal, he accused state governments of making such sites “legitimate attacks on the CFTC’s regulatory authority.” Selig also argued that his agency would no longer sit idly by while “overzealous state governments” undermined the agency’s “exclusive jurisdiction” over the industry.
