Arizona Attorney General Kris Mayes has filed criminal charges against prediction platform Kalshi, accusing it of operating an illegal gambling business without a license and offering election wagering in violation of state law.
The complaint, filed in Maricopa County court, includes 20 counts, alleging that Kalshi accepted bets from Arizona residents on a variety of events, including the 2028 presidential race and the 2026 Arizona gubernatorial election and primary—activities that are illegal in the state. This marks the first time a U.S. state has brought criminal charges against such a prediction platform, signaling an escalation in regulatory enforcement from civil disputes to criminal prosecution.
Kalshi argues that it is subject to federal oversight by the Commodity Futures Trading Commission and should not be bound by state gambling laws. The company has previously filed federal lawsuits against Arizona, Iowa, and Utah, claiming that state regulatory efforts infringe upon the federal government’s exclusive jurisdiction over derivatives trading.
Mayes countered that Kalshi is attempting to evade legal accountability by suing states, and that the criminal charges are a response to the company’s federal litigation. Kalshi, in turn, accused state officials of disrupting the judicial process and called the charges meritless, vowing to fight them in court.
Federal officials have voiced support for the prediction industry. The chair of the CFTC stated that legal attacks by state governments are undermining the agency’s exclusive jurisdiction over the sector. The dispute sets the stage for a potential showdown between federal and state regulatory authority.