Arizona Charges Prediction Market Kalshi With Criminal Illegal Gambling

Mar 17th, 2026 4:57 PM EDT

Arizona Attorney General Kris Mayes raised the stakes in the ongoing fight with prediction markets by filing misdemeanor criminal charges against Kalshi. The first-in-the-nation criminal charges filed against a prediction market accuse Kalshi of running an unlicensed gambling operation and taking illegal bets on elections in the state.

The 20-count complaint, filed in Maricopa County Monday, targets KalshiEx LLC and Kalshi Trading LLC. Prosecutors allege the platform accepted wagers from Arizona residents on professional and college sporting events, individual player performance props, and political contests — including four counts of election wagering tied to the 2028 presidential race, the 2026 Arizona governor's race, the 2026 Republican gubernatorial primary, and the 2026 Arizona Secretary of State race.

"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 press release. "No company gets to decide for itself which laws to follow."

A Kalshi spokesperson sent the following response to kobe.bookies.com

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.

Kalshi Had Sued Arizona Last Week

Kalshi has pushed back on that framing, arguing it operates as a federally regulated swaps exchange — a financial instrument, not a gambling platform. The company sued Arizona on March 12 in what Mayes characterized as a preemptive move to avoid accountability under state law. Kalshi also filed a motion for a preliminary injunction in Arizona federal court.

This a notable move, despite the nearly dozen civil lawsuits Kalshi is facing in multiple state and federal courts across the nation.

According to legal analyst Daniel Wallach, Monday's complaint marks the first criminal charges filed against Kalshi in any U.S. court — a development he says significantly raises the stakes ahead of an upcoming Ninth Circuit oral argument in the case.

Sports betting is legal and available online in Arizona, but operators like FanDuel and DraftKings had to meet state regulatory standards and pay taxes to operate there. Arizona law also outright bans election wagering, regardless of how a platform classifies its contracts.

"Arizona will not be bullied into letting any company place itself above state law," Mayes said.

Arizona Charges Prediction Market Kalshi With Criminal Illegal Gambling

Kalshi Had Sued Arizona Last Week

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