Arizona Attorney General Kris Mayes filed criminal charges against Kalshi today, accusing the CFTC-regulated prediction market platform of operating an illegal gambling business in the state and accepting bets on Arizona elections. It’s the first time any state has brought criminal charges against the company, and a significant escalation from the cease-and-desist letters and civil injunctions that have defined the state vs. Kalshi fight until now. The 20-count criminal indictment, filed in Maricopa County Superior Court, names both KalshiEx LLC and Kalshi Trading LLC.
The charges allege Kalshi accepted wagers from Arizona residents on professional and college sports, player props, and whether the SAVE Act would become federal law. Four counts are tied specifically to election wagering, including contracts on the 2028 presidential race, the 2026 Arizona gubernatorial race, the 2026 Arizona Republican gubernatorial primary, and the 2026 Arizona Secretary of State race. 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 said in a statement.
No company gets to decide for itself which laws to follow. The charges are misdemeanor-level, carrying potential penalties of $20,000 per sports bet and $10,000 per election contract. The escalation comes less than a week after Kalshi preemptively sued Arizona on March 12 following a series of warnings from the state dating back to May 2025. Unlike CFTC-regulated prediction markets from traditional sports betting and DFS companies like DraftKings and FanDuel, the state’s enforcement actions against Kalshi mark a new phase in the dispute.
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