Berliner Boersenzeitung - Arizona charges prediction market Kalshi with illegal election betting

The 20-count filing in Maricopa County Superior Court charges Kalshi with four counts of election wagering, which is banned in Arizona, as well as 16 counts of illegal betting and wagering, mainly on sporting events.

"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," Attorney General Kristin Mayes said. "No company gets to decide for itself which laws to follow."

Once dismissed as a niche corner of the crypto world, prediction markets have rapidly broken into the mainstream in the United States, positioning themselves as an alternative to both traditional polling and licensed sports betting.

But Kalshi faces similar legal challenges in several other states where gaming regulators have issued cease-and-desist orders or filed suit accusing the platform of operating an unlicensed gambling business.

Platforms like Kalshi and its biggest rival Polymarket remain illegal or unregulated in most countries outside the United States, where regulators have generally classified them as unlicensed gambling.

The charges allege Kalshi accepted wagers on the outcome of the 2028 US presidential race, the 2026 Arizona gubernatorial election and its Republican primary, and the 2026 Arizona secretary of state race.

Among the specific bets cited was a $2 wager on whether JD Vance would win the presidency in 2028.

The remaining counts allege Kalshi operated an unlicensed sports wagering business, accepting bets as small as $1 on NFL, NBA, college basketball and Super Bowl matchups.

New York-based Kalshi has positioned itself as a federally regulated "event contracts" exchange rather than a traditional sportsbook, a distinction that has fuelled ongoing legal battles with state regulators.

Kalshi dismissed the charges as "seriously flawed" and "gamesmanship," saying Arizona was attempting to short-circuit its own lawsuit against the state, filed on March 12.

Kalshi argues that its activities are not gambling but something closer to market trading and that this places its activities beyond the reach of state authorities.

"These charges are meritless, and we look forward to fighting them in court," the company said.

(Y.Yildiz--BBZ)