Share 
The state of Arizona is escalating its legal battle against Kalshi, filing a 20-count criminal complaint accusing the prediction market of violating state gambling laws.
Arizona Attorney General Kris Mayes filed the charges on Monday, alleging that between Dec. 14, 2025, and March 12, 2026, Kalshi illegally accepted wagers on sporting events and elections. The misdemeanor charges highlight an intensifying regulatory turf war over the legality of prediction markets.
State statute may offer Kalshi a defense
While Mayes cites Arizona Revised Statute § 13-3301 as the basis for the prosecution, the language of the law may actually bolster Kalshi’s defense.
The statute defines “gambling” or “wagers” as risking something of value for the opportunity to benefit from a “game or contest of chance or skill or a future contingent event.” However, the law includes a specific exclusion that Kalshi is expected to leverage.
The statute notes that wagering “does not include bona fide business transactions that are valid under the law of contracts, including contracts for the purchase or sale at a future date of securities or commodities.”
This aligns with the core argument long maintained by prediction markets: that financial gains from event contracts result from derivative trades rather than traditional gambling.
CFTC asserts jurisdictional authority
The Commodity Futures Trading Commission (CFTC), which maintains it holds sole authority over prediction markets, struck a combative tone regarding the state-level charges. CFTC Chairman Michael Selig issued a statement on X criticizing the move:
The legal friction in Arizona serves as a microcosm of a broader national conflict. While several states have attempted to impose local regulations on these markets, the CFTC has consistently pushed back against what it characterizes as an infringement on federal authority.
In response to the charges, Kalshi filed a motion seeking a preliminary injunction and requesting that the case be moved to federal court. A hearing on that motion is scheduled for April 3, while Kalshi’s arraignment in state court remains set for April 13.
