Arizona’s attorney general has escalated her office’s fight against the online prediction market Kalshi, filing a 20-count criminal indictment against the companies behind the platform and accusing them of running an illegal gambling operation dressed up in financial industry language.
The charges, all misdemeanors, were filed Monday against KalshiEx LLC and Kalshi Trading LLC. Sixteen counts relate to illegal betting and wagering under Arizona law, while four separate counts address election wagering — a distinct offense under a different state statute. Attorney General Kris Mayes was direct in her characterization of the business: regardless of how the company labels itself, she said, accepting bets on outcomes is gambling, and gambling without state authorization is illegal in Arizona.
The indictment landed just five days after Kalshi moved to get ahead of the state, filing a preemptive lawsuit against Arizona on March 12th in what appeared to be an attempt to secure a favorable legal ruling before charges could be brought. Mayes dismissed the maneuver, saying Arizona would not be pressured into allowing any company to operate outside the law.
Prediction markets occupy a contested legal space. The platforms allow users to buy and sell contracts tied to the likelihood of future events — anything from election outcomes to weather events to sporting results. The Commodity Futures Trading Commission currently treats them as financial instruments and permits them to operate nationally while legal questions are sorted out in the courts. The Trump administration has publicly backed both Kalshi and rival platform Polymarket as the regulatory battle unfolds.
Arizona is not alone in pushing back. Several other states have moved to restrict or ban prediction markets, setting up a widening conflict between state gambling laws and federal financial regulators over who ultimately has the authority to govern these platforms.
For Mayes, the Kalshi indictment fits a pattern. Her office has also taken on Ticketmaster, pursued housing discrimination cases and challenged federal funding cuts — positioning her as one of the more aggressive state attorneys general in the country when it comes to consumer protection enforcement.
