Arizona has filed 20 criminal charges against prediction market platform Kalshi, accusing it of operating an illegal gambling business and offering election wagering within the state.
Kalshi co-founder Tarek Mansour rejected the case as a regulatory overreach, arguing Arizona is attempting to undermine federal oversight of the platform by the Commodity Futures Trading Commission.
“This is a total overstep,”
Said Kalshi co-founder Tarek Mansour, adding the charges “have nothing to do with gambling or the merits” and are aimed at disrupting a broader legal dispute over regulatory control.
Arizona Attorney General Kris Mayes said the state’s laws prohibit both unlicensed wagering operations and betting on elections, positioning the case as a straightforward enforcement of state gambling rules.
The dispute has drawn federal attention, with CFTC Chairman Mike Selig describing the case as a jurisdictional conflict and stating criminal prosecution was “entirely inappropriate” as regulators assess their response.
Legal experts say the case reflects a growing national conflict between state authorities and federally regulated prediction markets, with attorney Aaron Brogan noting it represents a fundamental clash over control and tax revenues tied to gambling activities.
Kalshi, alongside Polymarket, dominates the prediction market sector with over 90% of notional trading volume, as the broader legal battle across states including New York, Tennessee, and Massachusetts tests whether federal or state law ultimately governs these platforms.