Arizona Attorney General Kris Mayes has taken the unprecedented step of filing 20 misdemeanour charges against the prediction market operator Kalshi.
The charges allege that Kalshi has been operating an illegal gambling business within the state of Arizona and unlawfully accepting wagers on various political elections. While Kalshi has faced regulatory pushback in other states, this marks the first time the company has faced criminal action.
Allegations of Illegal Election Wagering
The filing, submitted on March 16 in the Superior Court of Maricopa County, includes 16 counts of betting and wagering (Class 1 misdemeanours) and four counts of election wagering (Class 2 misdemeanours). The Attorney General’s office alleges that Kalshi accepted bets from Arizona residents on a variety of events without the necessary licenses, violating long-standing state laws.
The wagers in question covered a broad spectrum, ranging from sporting events and individual player performances to sensitive political contests. Specifically cited were wagers on the 2028 US Presidential race, the 2026 Arizona Gubernatorial contest, and several state-level primary races.
A Firm Stance on State Law
Attorney General Kris Mayes was unyielding in her assessment of the company’s business model:
“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. No company gets to decide for itself which laws to follow.”
This criminal action follows a cease-and-desist letter sent by Arizona to Kalshi last year. In response, Kalshi recently sued the state, attempting to preempt further restrictions. However, Mayes noted:
“Arizona will not be bullied into letting any company place itself above state law.”
