Arizona Attorney General Kris Mayes recently announced that her office has filed criminal charges against the operating company of the prediction market platform Kalshi for gambling and related offenses.
Mayes stated, “Kalshi may package itself as a ‘prediction market,’ but in reality, it is engaging in illegal gambling activities and betting on the election outcomes in Arizona, both of which violate Arizona law.” She emphasized, “No company can unilaterally decide which laws to follow.”
In response, a Kalshi spokesperson said, “Unfortunately, a state can bring criminal charges based on extremely weak grounds.” The spokesperson further pointed out, “States like Arizona are trying to regulate a national financial exchange individually and are doing everything they can to attempt to do so. As other courts have recognized, and as the Commodity Futures Trading Commission (CFTC) has confirmed, Kalshi falls under federal jurisdiction. It is different from the services offered by sports betting and casinos to their customers and should not be subject to inconsistent state laws.”
Previously, the CFTC chairman expressed support for having “exclusive jurisdiction” over prediction markets.