Arizona has filed criminal charges against Kalshi, accusingthe New York-based prediction markets platform of running an unlicensedgambling business and accepting bets on elections. Attorney General Kris Mayessaid the company “may brand itself as a prediction market, but it is takingillegal bets on Arizona elections,” which violates state law.The 20-count filing in Maricopa County Superior Court claimsKalshi allowed Arizona residents to wager on professional and college sports,individual player performances, and political outcomes.Gambling or Trading ProductsProsecutors cited bets on the 2028 U.S. presidential raceand upcoming 2026 state elections, including the governor and secretary ofstate contests.Arizona said it filed criminal charges against Kalshi for operating an illegal gambling business in the state. https://t.co/EMoFtUsRZ5— Bloomberg (@business) March 17, 2026Kalshi said in a statement that Arizona’s accusations reston “paper-thin arguments,” arguing that its platform operates as a financialexchange regulated by the U.S. Commodity Futures Trading Commission. Thecompany added that different states should not oversee a “nationwide financialexchange.”You may also like: Polymarket Grabs Nearly 55% of Prediction Markets as Iran Bets Test CFTC CrackdownArizona’s action comes amid a broader regional and nationalfight over how to regulate Kalshi’s event contracts, with the company nowentangled in dozens of cases that pit its claim of exclusive federal oversightby the U.S. Commodity Futures Trading Commission against the authority ofstates to enforce their gambling laws.In recent weeks, Kalshi has preemptively sued regulators instates including Arizona, Iowa and Utah after pushback on its sports andpolitical markets, while several states and tribal authorities have launchedtheir own actions to block in-state access to the platform.Join the inaugural Finance Magnates Singapore Summit 2026, which will bring together brokers, fintechs, banks, EMIs, wealth managers, and hedge funds across APAC.Attorney General Mayes said Kalshi has a pattern of suingstates rather than complying with their wagering laws. The company recentlyfiled cases against Iowa, Utah, and Arizona to block state enforcement.Courts have issued mixed rulings so far: a judge inTennessee allowed Kalshi to keep operating under a temporary stay, whiledecisions in states such as Maryland, Massachusetts and Ohio have backed statepowers to treat the firm’s contracts as gambling products subject to locallicensing rules.States Push Back on CFTCA federal judge in Ohio recently rejected Kalshi’s bid foran injunction, ruling that the state’s authority to regulate gamblingoutweighed the firm’s operational claims. The Arizona case marks the firstcriminal prosecution against Kalshi by a state.The latest development comes as a defiance to a growingcampaign by federal regulators to claim sole authority over prediction markets,deepening a clear split between Washington and the states. CFTC Chair Michael Selig has recently pushed a moreassertive line, directing the agency to intervene in court battles. He insists that federal derivatives rules, not stategambling codes, should govern event contracts. He has cast the wave of stateenforcement against platforms such as Kalshi, Coinbase, Crypto.com andPolymarket as part of a broader state-led offensive.This article was written by Jared Kirui at www.financemagnates.com.