Arizona Charges Kalshi with 20 Criminal Counts: Unlicensed Gambling + Accepting Election Bets, Prediction Market Lawsuit Intensifies

Arizona Attorney General Kris Mayes has filed 20 criminal charges against the prediction market platform Kalshi, including operating unlicensed gambling businesses and accepting election-related bets covering the 2028 presidential election and various local elections in Arizona.
(Background: Prediction market Kalshi faces formal Nevada lawsuit for “unlicensed gambling”! Trump administration supports: event contracts are not traditional gambling)
(Additional context: Brief history of prediction markets: from papal elections to Polymarket)

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• 20 charges cover sports and election betting
• No company can decide which laws to follow
• Kalshi preemptively sues, Arizona responds with criminal charges

The legal showdown between Arizona and prediction market platform Kalshi has officially ignited. On the 17th, Arizona Attorney General Kris Mayes announced 20 criminal charges against KalshiEx LLC and Kalshi Trading LLC, alleging that the two companies operated gambling businesses without proper licensing in Arizona and accepted bets related to state elections, both violations of Arizona law.

20 charges cover sports and election betting

According to the indictment from the Attorney General’s office, Kalshi is suspected of accepting bets from Arizona residents on sports events and proposition bets, with four charges directly targeting election betting, specifically involving:

• 2028 U.S. presidential election
• 2026 Arizona governor election
• 2026 Arizona Republican primary
• 2026 Arizona Secretary of State election

Additionally, Kalshi is accused of further violating Arizona law by opening betting on whether the SAVE Act would be enacted.

No company can decide which laws to follow

Attorney General Mayes directly challenged Kalshi’s characterization as a “prediction market” in her statement:

Kalshi may call itself a prediction market, but what it’s actually doing is operating illegal gambling, taking bets on Arizona elections, both of which violate Arizona law. No company can decide which laws to obey.

She also responded to Kalshi’s preemptive lawsuit: “Arizona will not be bullied by any company, nor will it allow itself to be overridden by corporate interests.”

Kalshi preemptively sues, Arizona responds with criminal charges

This criminal case follows Kalshi’s early legal move. On March 12, Kalshi filed a lawsuit against Arizona, attempting to assert federal preemption: that prediction contracts regulated by the CFTC should not be subject to state law.

Kalshi’s federal license was issued by the U.S. Commodity Futures Trading Commission (CFTC), which under the Trump administration had publicly supported the position that event contracts are not traditional gambling.

However, Arizona’s response was to pursue criminal charges rather than a civil suit, indicating a tougher stance by the state government to assert jurisdiction. The case now involves conflicting interpretations of federal and state regulations, and its outcome could significantly impact the prediction market industry across the U.S.

Following Nevada, Arizona becomes the second state to take legal action against Kalshi, with prediction market regulation disputes spreading across U.S. states.

Related reading: Prediction market Kalshi faces “unlicensed gambling” charges and is formally sued by Nevada! Trump administration supports: event contracts are not traditional gambling