Arizona Attorney General Kris Mayes has turned up the heat on prediction market heavyweight Kalshi, filing 20 criminal counts in Maricopa County that accuse the CFTC-regulated platform of running an illegal wagering business that took bets on both sports and elections inside the state. The charging information names KalshiEx LLC and Kalshi Trading LLC and cites markets that range from player prop bets to action on who will win Arizona’s 2026 governor’s race. It is the first time a state attorney general has brought criminal charges against a major U.S. prediction market operator, a sharp escalation in a regulatory fight that has been brewing for months.
What prosecutors say Kalshi did
According to a press release from the Arizona Attorney General’s Office, the charging information alleges that Kalshi accepted wagers from Arizona residents on professional and college sporting events, player prop markets and multiple election contests, including the 2026 Arizona governor’s race. Mayes labeled the platform an illegal gambling operation and faulted the company for suing states to fend off enforcement instead of adjusting its products to comply with local law.
Inside the charging document
The 20-count information lays out example wagers and dates, from small proposition bets tied to the Super Bowl to $30 bets on NFL games, and classifies most counts as betting-and-wagering misdemeanors with several designated as election-wagering misdemeanors, according to the filing in Maricopa County Superior Court. Prosecutors point to multiple transactions they say show Kalshi took wagers inside Arizona without securing a state license.
Kalshi’s growth and federal suit
Kalshi has defended its products as federally regulated “event contracts” and has pushed back in court. The company sued Arizona on March 12 to block enforcement, a move Mayes’ office criticized in its press release as part of a broader pattern of litigating rather than registering. Company statements and outside reporting have highlighted rapid growth in volume and revenue, with references to roughly a $1 billion-plus run rate and heavy Super Bowl and election activity. For Kalshi’s own spin and reported expansion plans, including international moves, see the company’s blog and coverage from PYMNTS.
Regulatory tug of war
The Arizona case drops right into a national power struggle over who gets to police event contracts, with state consumer protection officials and gaming regulators on one side and prediction market operators and federal regulators on the other. National coverage has framed the fight as a broader turf battle that could reshape how sports and political markets are allowed to operate, according to Axios. The Commodity Futures Trading Commission has signaled that it wants a say, recently issuing advisories that argue many such contracts fall within federal jurisdiction, adding an extra layer of federal-state tension. The CFTC has continued to assert that federal oversight should apply to a wide swath of prediction markets.
Legal implications
The Arizona information charges Kalshi with class 1 betting-and-wagering misdemeanors and class 2 election-wagering misdemeanors under state law, exposing the company and its U.S. entities to criminal prosecution in Maricopa County as the case moves ahead. The counts rely on state statutes that ban operating an unlicensed wagering business and on separate provisions that bar election wagering, while the broader dispute raises classic preemption questions about whether federal regulation displaces those state rules. The Maricopa County Superior Court filing sets out the statutory counts, and how judges handle jurisdictional and procedural motions will determine whether the case stays in state court or is put on hold while federal issues play out.
What happens next
Prosecutors are expected to keep pressing the state charges in Maricopa County while Kalshi’s federal litigation creates a thicket of questions about stays, preemption and which court should decide what. Mayes’ office has made the criminal filing public and said a copy of the information is available online. Kalshi’s lawyers maintain that the firm is operating under federal authority, setting up a test case that legal observers say could take months or even years to fully resolve. In the near term, judges in state and federal court will be sorting through motions and deciding how far federal oversight should go in limiting state-level enforcement.
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