Arizona Attorney General Kris Mayes has filed misdemeanor criminal charges against Kalshi, accusing the company of operating an illegal gambling and election wagering business in the state without a license.
The case marks the first criminal charges filed against Kalshi, which faces growing legal pressure across multiple states over whether its event-contract platform falls under federal financial regulation or state gambling law.
Arizona charged Kalshi with 20 misdemeanor counts tied to accepting wagers inside the state, including bets on state elections, which are specifically prohibited under Arizona law.
Mayes stated that no company can independently choose which laws apply to its operations. Kalshi, a financial technology company, maintains that its event contracts fall under federal oversight by the Commodity Futures Trading Commission rather than state gambling authorities.
A federal judge, Michael Liburdi, recently denied Kalshi's request for a temporary restraining order that sought to block Arizona from enforcing state law and directed the company to justify why the dispute belongs in federal court.
Other states including Michigan, Massachusetts and Ohio have also challenged Kalshi's operations through civil action or enforcement efforts.
The dispute comes as lawmakers debate new federal legislation that would prohibit sports event contracts unless specifically authorized by states and fully ban prediction markets tied to elections and government actions.
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