Arizona AG charges Kalshi with illegal betting as state battles widen

Arizona Attorney General Kris Mayes filed 20 counts of criminal charges against the prediction market platform Kalshi, accusing it of running an illegal gambling operation and accepting bets from Arizona residents on various events, including professional/college sports and state elections.

Kalshi argues that its event contracts are regulated under the federal Commodity Exchange Act enforced by the CFTC, asserting federal authority supersedes state law. However, Arizona law prohibits unlicensed betting and wagering on elections. Mayes criticized Kalshi for suing states like Arizona, Iowa, and Utah instead of adhering to established legal frameworks.

This legal conflict mirrors broader regulatory battles; a recent Ohio judge denied Kalshi's motion for a preliminary injunction, stating federal law did not preempt state sports gambling laws. Meanwhile, both Kalshi and competitor Polymarket are reportedly seeking multi-billion dollar valuations, and Polymarket also faced scrutiny, with Argentine authorities ordering a nationwide block of its platform.

(Source：The Block)