Arizona charges Kalshi with operating an illegal gambling business
20-count charge sheet says Kalshi accepted bets from Arizona residents on a wide range of events in violation of Arizona law
Arizona Attorney General Kris Mayes has filed criminal charges against KalshiEx and Kalshi Trading, the companies behind the Kalshi prediction markets platform, for operating an illegal gambling business in Arizona without a license as well as for election wagering.
“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 Attorney General 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.
On Thursday, 12 March, Kalshi sued the State of Arizona preemptively in an attempt to avoid accountability under Arizona law.
“Arizona will not be bullied into letting any company place itself above state law,” said Attorney General Mayes.
Daniel Wallach, a lawyer who specializes in gaming law, commented: “There’s clearly going to be a domino effect. These are the first criminal charges filed against Kalshi anywhere in the US, but they may not be the last.”
Kalshi stated: “Sadly, a state can file criminal charges on paper thin arguments. States like Arizona want to individually regulate a nationwide financial exchange, and are trying every trick in the book to do it. As other courts have recognized and the CFTC affirms, Kalshi is subject to federal jurisdiction. It’s different from what sportsbooks and casinos offer their customers, and it should not be overseen by a patchwork of inconsistent state laws.”
