Arizona accuses prediction market Kalshi of illegal gambling in 20-count criminal indictment

PHOENIX – The Arizona Attorney General’s Office on Monday filed misdemeanor criminal charges against the companies behind the Kalshi prediction markets platform.

A 20-count indictment accuses KalshiEx LLC and Kalshi Trading LLC of illegally accepting bets and attempting to circumvent state law by calling the operation a prediction market.

Sixteen counts are for the offense of betting and wagering, and four are for election wagering, which violates a separate statute. The election wagering charges are for allegedly accepting illegal bets on the 2026 general election and Republican primary for Arizona governor, the 2026 race for Arizona secretary of state and the 2028 presidential race.

All of the charges are misdemeanors.

“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,” Attorney General Kris Mayes said in a press release. “No company gets to decide for itself which laws to follow.”

The indictment came out five days after Kalshi filed a preemptive lawsuit against the state on March 12.

“Arizona will not be bullied into letting any company place itself above state law,” Mayes said.

Arizona isn’t only state moving against Kalshi

Prediction markets allow participants to buy and sell contracts tied to the probable outcome of an event. Customers can wager on everything from the weather to war through an online app. Sporting events make up much of the action.

Arizona, where sports betting is legal but regulated, is now one of several states taking action to ban prediction markets.

However, the Trump administration has thrown its support behind the operators.

The Commodity Futures Trading Commission currently regulates prediction markets, allowing them to operate in all 50 states as the issue works its way through the court system.

The Associated Press contributed to this report.

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