Arizona Filed Criminal Charges Against Kalshi
Arizona Attorney General Kris Mayes filed 20 criminal misdemeanor charges against Kalshi, a New York-based platform that lets users stake money on the outcomes of political, sporting, and economic events, in Maricopa County Superior Court on Tuesday.
The counts allege Kalshi accepted bets from Arizona residents on professional and college sporting contests, player performance propositions, legislative outcomes, and state elections.
Under Arizona law, operating an unlicensed wagering business is a crime; so is accepting bets on elections, regardless of licensing. Each count carries fines of $10,000 to $20,000. These are the first criminal charges brought against Kalshi in the United States.
Four counts involve election wagering: contracts on the 2028 presidential race, the 2026 Arizona gubernatorial race, the Republican gubernatorial primary, and the 2026 Arizona Secretary of State race.
The Arizona Capitol Times reported that prosecutors used undercover investigators who personally placed wagers on the platform, including on a February women’s basketball game between Arizona and Arizona State on which $176,683 was staked in total.
Mayes noted her office was gathering evidence before Kalshi sued the state on March 12. “Kalshi is making a habit of suing states rather than following their laws,” she said.
A Federal-State Standoff
Kalshi argues its event contracts are federally regulated derivatives, not gambling, placing them under exclusive Commodity Futures Trading Commission (CFTC) jurisdiction. The CFTC has backed that view.
Chairman Michael Selig responded on X within hours of Tuesday’s charges, calling the prosecution “entirely inappropriate” and saying the agency was watching closely. Selig had previously written in a Wall Street Journal op-ed that states had attacked the CFTC’s authority and the agency would no longer stand aside.
Courts have split on the question. A federal judge in Nevada found Kalshi’s sports contracts subject to state gaming regulators; Massachusetts reached a similar view. A Tennessee federal judge ruled the other way, temporarily blocking state enforcement, and Kalshi has secured preliminary injunctions in New Jersey and Tennessee.
In Ohio, the company was denied an injunction, the judge ruling the state’s interest in enforcing its gambling laws outweighed Kalshi’s concerns. Arizona’s criminal approach is new territory: misdemeanor charges rather than a civil shutdown order means Kalshi is not immediately barred from operating in the state while the case runs.
The Wider Battleground
Arizona is not acting alone. Michigan and Massachusetts have filed civil lawsuits; Iowa, Utah, and Oregon have launched investigations or taken legal action.
Kalshi has preemptively sued several states in federal court, a strategy gaming attorney Daniel Wallach described as a “win the race to the courthouse” tactic, effective at securing injunctions so far, though Wallach told AZ Family he expects more states to pursue criminal charges.
A bipartisan House bill this session would ban event contracts on sports unless a state specifically permits them and prohibit prediction markets on elections outright. Arizona’s criminal case is the sharpest test yet of whether federal backing can shield a prediction platform from state criminal law.
