Kalshi Hit With Criminal Charges in Arizona, State Says Company Is Operating Illegal Betting
Posted on: March 17, 2026, 01:14h.
Last updated on: March 17, 2026, 01:14h.
- Kalshi sued Arizona last week, state fired back today
- In a 20-count criminal complaint, the state says Kalshi is operating an illegal wagering platform
- State also criticized Kalshi for offering election event contracts
In a wide-ranging 20-count criminal complaint, the state of Arizona claims Kalshi is running an illegal betting platform, adding that the prediction market operator shouldn’t be offering derivatives tied to political outcomes.
Arizona Attorney General Kris Mayes (D) filed the complaint against the company today — five days after Kalshi preemptively sued the state. In part, the company’s litigation against the state is a bid to continue offering sports event contracts there. In the complaint against Kalshi, the state overtly mentions political and sports event contracts as possible violations of state law.
The 20-count criminal information alleges that Kalshi accepted bets from Arizona residents on a wide range of events in violation of Arizona law,” according to a statement issued by Mayes’ office. “These events included professional and college sporting contests, proposition bets on individual player performance, and whether the SAVE Act would become law. Among the charges are four counts of election wagering, including bets on the 2028 presidential race, the 2026 Arizona gubernatorial race, the 2026 Arizona Republican gubernatorial primary, and the 2026 Arizona Secretary of State race.”
Under Arizona law, no company can offer products resembling sports wagering and all betting on elections is outright barred in the state.
Arizona Move Against Kalshi Not Surprising
Among the myriad of state-level legal tussles involving Kalshi and other prediction market operators, Arizona is one of the least surprising because the state has consistently taken a hard line against the industry.
Last December, the state pulled Underdog’s daily fantasy sports (DFS) license and warned other gaming companies they’re at risk of similar fates if they push the prediction markets envelope. In 2025, Arizona also issued cease and desist letters to Kalshi and Polymarket while Crypto.com pulled its prediction market platform in the state.
Mayes says Kalshi’s modus operandi is to sue states rather than complying with the regulatory framework laid out in those jurisdictions.
“Kalshi is making a habit of suing states rather than following their laws. In the last three weeks alone, the company has filed lawsuits against Iowa and Utah, and now Arizona,” she said in the statement. “Rather than work within the legal frameworks that states like Arizona have established, Kalshi is running to federal court to try to avoid accountability.”
Kalshi Running ‘Illegal’ Betting Op in Arizona, Says AG
The central question for courts to decide as it relates to prediction markets is whether or not these companies are offering sports betting under the guise of event contracts. Kalshi and some of its competitors believe they’re protected by federal preemption and that the Commodities Exchange Act (CEA) makes clear event contracts are not bets.
States don’t agree and they’re challenging prediction markets operators on the grounds that Congress and the Supreme Court have long held that gaming regulation is executed at the state, not federal level. For her part, Mayes says Kalshi doesn’t have the luxury of picking and choosing the laws it does and doesn’t follow.
“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,” said the attorney general. “No company gets to decide for itself which laws to follow.”
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