Arizona’s Attorney General Kris Mayes has filed criminal charges against Kalshi on the grounds the prediction markets platform is operating an illegal gambling business in Arizona without a licence.
The case marks the first time a state has pursued criminal, as opposed to civil, procedures against Kalshi.
The misdemeanour charges, which includes 20 counts, allege Kalshi accepted bets from Arizona residents on a range of events, violating Arizona law.
Sporting wagers were accepted as well as those on political outcomes, such as whether the Safeguard American Voter Eligibility (SAVE) Act would become law.
Also found among the charges are four counts of election wagering: on the 2028 presidential race, the 2026 Arizona gubernatorial vote, the 2026 Arizona Republican gubernatorial primary and the 2026 Arizona Secretary of State ballot.
Arizona law outright prohibits wagering on election outcomes.
On Thursday, 12 March, Kalshi sued the state of Arizona in what it viewed as a pre-emptive attempt to “avoid accountability” under Arizona law.
US District Judge Michael Liburdi denied the platform’s request for a temporary restraining order.
On the case, Mayes remarked: “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.
“No company gets to decide for itself which laws to follow. Arizona will not be bullied into letting any company place itself above state law.”
Kalshi responded in a statement: “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 recognised and the Commodity Futures Trading Commission [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.”
CFTC chairman Mike Selig responded to the charges on X, calling them “entirely inappropriate”.
Massachusetts, Nevada and Michigan have all filed civil suits against Kalshi to prevent it from operating within their state borders.
Last week Kalshi entered Brazil amid protests against “regulatory circumvention” by the country’s gambling trade body, the Instituto Brasileiro de Jogo Responsável (IBJR).
Arizona’s sports betting handle for 2025 came in at $9.2bn, though handle in December 2025 declined 3% year on year (YOY) and 15.5% month on month to $822m.
Legal sports betting launched in Arizona in 2021 with 20 licences up for grabs, including 10 allocated for tribal casinos and 10 for professional sports teams or organisations.
The post Arizona AG hits Kalshi with illegal gambling charge first appeared on EGR Intel.
Prediction markets platform accused of accepting bets in the state without a license as well as illegally offering wagers on US elections in landmark legal action
The post Arizona AG hits Kalshi with illegal gambling charge first appeared on EGR Intel.