Prediction market Kalshi sued in Arizona for allegedly operating illegal gambling.
Arizona Attorney General Chris Mays has filed criminal charges against the prediction market
Attorney General Mayes Charges Kalshi With Illegal Gambling Operation, Election Wagering in Arizona | Attorney General's Office
https://www.azag.gov/press-release/attorney-general-mayes-charges-kalshi-illegal-gambling-operation-election-wagering
Arizona indicts prediction market Kalshi for running illegal gambling operation - Ars Technica
https://arstechnica.com/tech-policy/2026/03/arizona-indicts-prediction-market-kalshi-for-running-illegal-gambling-operation/
Kalshi's legal troubles pile up, as Arizona files first ever criminal charges over 'illegal gambling business' | TechCrunch
https://techcrunch.com/2026/03/17/kalshis-legal-troubles-pile-up-as-arizona-files-first-ever-criminal-charges-over-illegal-gambling-business/
On March 17, 2026, local time, Attorney General Mays issued a statement saying, 'Kalshi may call itself a 'prediction market,' but in reality it is running an illegal gambling business and accepting bets on Arizona elections. Both of these are violations of Arizona law,' and filed criminal charges against Kalshi.
This case marks the first criminal prosecution against Kalshi, but several other states in the United States are also preparing lawsuits against the company for operating illegal and unregulated sports betting.
Attorney Daniel Wallach stated, 'There will clearly be a domino effect,' and added, 'This is the first criminal lawsuit filed against Kalshi in the United States, but I don't think it will be the last,' suggesting that similar lawsuits may be filed against Kalshi in the future.
In response, Kalshi issued a statement saying, 'Unfortunately, states can file criminal charges on trivial grounds. States like Arizona are trying to regulate national financial exchanges individually and are taking every possible measure.'
Prediction markets like Kalshi allow users to bet on the outcome of various future events, such as 'Who will win the next World Cup?' Kalshi offers shares in the outcome of these events, which it claims are considered '
Meanwhile, Attorney General Mays alleges that Kalshi is running an illegal gambling operation related to four elections, including the 2028 US presidential election and the 2026 Arizona gubernatorial election. Gambling on elections is illegal under Arizona law.
The sports betting market is Kalshi's core business, accounting for approximately 90% of the site's trading volume and commission revenue. Transactions related to Super Bowl XL exceeded $1 billion (approximately 159 billion yen), and according to a Financial Times analysis, Kalshi records annual revenue of $1.3 billion (approximately 207 billion yen) from sports betting alone.
Furthermore, several states have issued cease and desist orders against Kalshi for operating illegal sports betting. Normally, sports betting is supervised and taxed by state regulatory authorities.
In response, Kalshi has filed a lawsuit seeking to block the cease and desist order. Attorney General Mays' lawsuit comes after Kalshi filed the lawsuit. Attorney General Mays criticized Kalshi, saying that 'not only is he not following state law, but he is also suing the state.'
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