Kalshi faces criminal charges in Arizona over election betting

Arizona Attorney General Kris Mayes filed a 20-count complaint in Maricopa County court on Tuesday against Kalshi, a prediction market platform—defined as a platform where users trade contracts based on the outcome of future events. The complaint accuses the company of engaging in unlicensed gambling activities and running an illegal gambling operation without a license, both of which violate state law. According to the filing, the platform accepted bets from Arizona residents on state elections, resulting in four counts of election wagering. The state alleges Kalshi 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.

Kalshi has argued that it is not in violation of state law because it is subject to federal regulation via the Commodity Futures Trading Commission (CFTC), the US federal regulator for derivatives. The company has taken preemptive legal action, suing Arizona’s Department of Gaming in federal court on March 12, arguing that the state’s regulatory attempts intrude on federal authority. Kalshi also recently filed similar lawsuits against Iowa and Utah. However, Attorney General Mayes argues that Kalshi is attempting to avoid accountability by suing states rather than following local laws, accusing the company of skirting state gambling laws. Mayes noted that Kalshi has filed lawsuits against Iowa, Utah, and Arizona within a three-week period, arguing that the company is running to federal court to avoid state legal frameworks.

Elisabeth Diana, Kalshi’s head of communications, called the Arizona criminal charges meritless and characterized them as gamesmanship related to the company’s own litigation. “Four days after Kalshi filed suit in federal court, these charges were filed to circumvent federal court and short-circuit the normal judicial process,” said Diana. She added that the charges attempt to prevent federal courts from evaluating whether Kalshi is subject to exclusive federal jurisdiction. Meanwhile, federal officials have signaled support for the prediction industry. Michael Selig, chair of the Commodity Futures Trading Commission, has accused state governments of waging legal attacks on the CFTC’s authority to regulate prediction sites, asserting that the federal regulator will not sit idly by while overzealous state governments undermine its jurisdiction.

Why it matters

This marks the first time a state has pursued criminal charges against Kalshi, signaling a major escalation in the jurisdictional battle between state authorities and the prediction market industry. The outcome could define the boundary between state-level gambling enforcement and federal financial regulation in the US.