Arizona files landmark criminal charges against prediction market Kalshi | CNN Politics

Arizona’s attorney general has filed the first-ever criminal charges in the US against a major prediction market company, accusing Kalshi of running an illegal gambling operation in violation of state law. The criminal case, filed Tuesday in Maricopa County Superior Court, is a serious escalation in the ongoing battle between states, prediction market sites and the federal government, over how the industry should be regulated. Arizona Attorney General Kris Mayes said the criminal charges were warranted because, in her view, Kalshi offers gambling, not futures contracts, and therefore would need state approval to operate. “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, a Democrat, said in a statement. “No company gets to decide for itself which laws to follow.” Prediction markets have exploded in recent months, and traders now spend about $5 billion each week on websites like Kalshi and Polymarket, according to Dune Analytics, which tracks trading volumes. Interest in the industry has spiked after controversies invo