Arizona Attorney General Files Criminal Complaint Against Kalshi Over Election Wagering, Gambling Allegations

Arizona Attorney General Kris Mayes has filed a criminal complaint against prediction market platform Kalshi, alleging the company operated an illegal gambling business and accepted wagers on elections and sporting events in violation of state law. 

According to a press release from the Arizona Attorney General’s Office, the complaint was filed Tuesday against KalshiEx, LLC and Kalshi Trading, LLC, the companies behind the Kalshi platform. The 20-count criminal complaint alleges the company accepted bets from Arizona residents on a range of events without a license. 

State prosecutors allege the platform facilitated wagers on professional and college sports, proposition bets on individual player performance, and legislative outcomes, including whether the SAVE Act (H.R. 22) would become law. 

The complaint also includes four counts tied specifically to election wagering, including bets on the 2028 presidential race, the 2026 Arizona gubernatorial race, the 2026 Arizona Republican gubernatorial primary, and the 2026 Arizona Secretary of State race. 

We're seeing an "insane situation" in which prediction markets like Kalshi let people bet on anything from elections to wars, @AZAGMayes says.

"Those things are just illegal in the state of Arizona," she tells @balin_om.

More details: https://t.co/TMPSoLDHFF pic.twitter.com/cd5uIVHaoS

— KTAR News 92.3 (@KTAR923) March 17, 2026

Arizona law prohibits operating an unlicensed wagering business and separately bans betting on elections. 

“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 attorney general’s office also stated that Kalshi filed a lawsuit against the State of Arizona on March 12 in an effort to block the enforcement of state law. Commenting on the preemptive lawsuit, Mayes added, “Arizona will not be bullied into letting any company place itself above state law.”

Arizona will not be bullied into letting any company place itself above state law.

Press Release: https://t.co/K88ipW71w7 pic.twitter.com/abfC2yxiLz

— AZ Attorney General Kris Mayes (@AZAGMayes) March 17, 2026

Additional reporting from AZ Family indicates the charges were filed in Maricopa County Superior Court and include misdemeanor counts related to both general wagering and election betting. 

According to Investment News, Kalshi has argued in prior disputes that its event-based contracts operate as financial instruments regulated at the federal level rather than as gambling products subject to state law, a position that has been challenged by multiple states. 

In a statement to CNBC, Kalshi said, “Sadly, a state can file criminal charges on paper-thin arguments,” and added, “States like Arizona want to individually regulate a nationwide financial exchange, and are trying every trick in the book to do it. As other courts have recognized and the CFTC affirms, Kalshi is subject to federal jurisdiction.”

As previously reported by The California Globe, state-level legal challenges against Kalshi have expanded in recent months. In Nevada, Attorney General Aaron Ford led a lawsuit against the company as prediction market activity surpassed $1 billion tied to major events such as the Super Bowl. 

Kalshi has filed an emergency request for a stay in the Nevada case, now on its way to the Ninth Circuit Court of Appeals, according to Next.io, with a ruling expected soon. The outlet reported that, should the Nevada Courts, which have already remanded the case, enter a temporary restraining order, Kalshi could seek emergency relief from the U.S. Supreme Court. 

According to Investment News, additional civil challenges are also progressing in Massachusetts and Michigan. CNBC reported that Arizona AG Kris Mayes cited a failed attempt by Kalshi to obtain a preliminary injunction against prosecution by the state of Ohio. In that case, U.S. District Court Chief Judge Sarah Morrison ruled that the company’s concerns regarding “harm [to] Kalshi’s users in Ohio” were “dwarfed by Ohio’s interest in exercising its police power, enforcing its duly-enacted laws, and regulating sports gambling to promote the public welfare.”

The Arizona case represents the first known criminal enforcement action filed by a state against the company and comes amid ongoing disputes over whether prediction markets fall under federal financial regulation or state gambling laws.