Kalshi Faces Criminal Charges in Arizona Over Election Betting

Arizona Attorney General Kris Mayes has filed criminal charges against KalshiEx LLC and Kalshi Trading LLC, the companies operating the Kalshi prediction markets platform, alleging illegal gambling and election wagering. The move comes after Kalshi preemptively sued the state, seeking to avoid accountability under Arizona law.

Attorney General Alleges Illegal Gambling Operation

According to a press release issued on Tuesday, March 17, 2026, Attorney General Mayes asserts that Kalshi is operating an illegal gambling business in Arizona without the required license and is facilitating bets on elections, both of which are violations of state law. “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,” Mayes stated. Source

Charges Include Election Wagering

The 20-count criminal information details that Kalshi accepted bets from Arizona residents on various events, including professional and college sporting contests, individual player performance, and the passage of the SAVE Act. Notably, four counts relate to election wagering, specifically bets on the 2028 presidential race, the 2026 Arizona gubernatorial race, the 2026 Arizona Republican gubernatorial primary, and the 2026 Arizona Secretary of State race. Source

Kalshi’s Response and Prior Lawsuits

Kalshi responded to the charges, calling them “seriously flawed” and “gamesmanship.” The company stated that the charges were filed shortly after they initiated a federal lawsuit against the state, and argued that the state is attempting to circumvent the federal court process and prevent a proper evaluation of whether Kalshi is under exclusive federal jurisdiction. Source, Source

This is not the first time Kalshi has pursued legal action to challenge state regulations. Prior to the Arizona lawsuit, Kalshi also sued Idaho and Utah. Source

CFTC Weighs In on Regulatory Authority

The U.S. Commodity Futures Trading Commission (CFTC) has asserted its authority over prediction markets. In February, the CFTC filed an amicus brief in federal court, defending its right to regulate prediction markets rather than individual states. The CFTC also stated it has full authority to police illegal trading practices on designated contract markets like Kalshi. Source

Potential Penalties

The misdemeanor charges against Kalshi carry potential penalties of $20,000 per bet on sports and $10,000 per election wager. Source

An initial court hearing is expected within a few weeks. Kalshi’s projected revenue for the year is approximately $1 billion. Source