Arizona files 20 criminal charges against Kalshi for flouting state gambling laws

Arizona has filed the first criminal charges against a prediction market website in the United States.

Kalshi is one of two major prediction market websites in the country (along with Polymarket), which allows users to make money off of almost anything.

'We just can't allow companies to come in here and override our laws.'

Whether it's Taylor Swift getting married or the future price of Bitcoin, prediction markets turn real-life events into shares that can be bought and sold depending on their value. The value changes based on which outcome users are putting their money into.

Like financial exchanges, these predictions are regulated federally by the Commodity Futures Trading Commission, but Arizona Attorney General Kris Mayes (D) is calling that into question.

"We just can't allow companies to come in here and override our laws or try to bypass our laws against online gaming outside of regulations," Mayes told Arizona's CBS 5.

Mayes' office put out a press release on Tuesday alleging that Kalshi has accepted bets from Arizona residents that violate state law.

The press release included a filing against Kalshi Trading LLC out of Delaware, listing 20 criminal charges related to what Arizona referred to as "proposition bets," which typically refer to sports bets focused on individual player performances.

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The filing listed 16 "betting and wagering" offenses and four counts of "election wagering."

This included "bets" on the 2028 presidential race, the 2026 Arizona gubernatorial race, the 2026 Arizona Republican gubernatorial primary, the 2026 Arizona Secretary of State race, and whether the SAVE Act would become law.

The alleged sports bets were on pro and college events, including prop bets on individual performances in those categories.

The state said that Arizona law prohibits operating an "unlicensed wagering business" and separately bans "betting on elections outright."

A Kalshi spokeswoman told Business Insider that she believes Arizona's charges are "seriously flawed" and an example of "gamesmanship."

"These charges are meritless, and we look forward to fighting them in court," the spokeswoman, Elisabeth Diana, told the outlet.

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Photo Illustration by Scott Olson/Getty Images

"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," AG Mayes said in the press release. "No company gets to decide for itself which laws to follow."

Mayes added, "Arizona will not be bullied into letting any company place itself above state law."

Kalshi's front page is currently covered in political predictions, which of course are subject to change. This includes the options to trade on topics like government shutdowns, U.S. tariff rates on China, and the results of the midterm elections.

Prediction markets have become so popular that they have forced major gambling platforms like DraftKings and FanDuel to create their own models, offering services to a national market as opposed to operating on a state-by-state basis.

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