Kalshi’s co-founder, Tarek Mansour, has called Arizona’s criminal case against the company a “total overreach” and comes across as an attack on a federally regulated exchange rather than standard gambling enforcement.
Mansour said the charges have “nothing to do with gambling or the benefits” and argued that Arizona is trying to short-circuit a broader court battle over who controls the prediction markets. Speaking to Bloomberg, he said Kalshi will continue to defend the company even as the legal battle expands.
Kalshi did not respond to CoinDesk’s request for comment.
Arizona Attorney General Kris Mayes filed a 20-count indictment against Kalshi this week, accusing the company of operating an illegal gambling business and offering to campaign in the state.
Her office said Arizona law prohibits both unlicensed betting operations and election betting.
Kalshi lets users trade contracts linked to real-world outcomes such as elections, sports and economic data. The company says these products are event contracts overseen by the Commodity Futures Trading Commission (CFTC), which recently signaled a more supportive federal stance on these platforms. Kalshi, along with Polymarket, accounts for the lion’s share of prediction market activity, accounting for more than 90% of theoretical volume, according to Dune data.
In a social media post, CFTC Chairman Mike Selig called the case a jurisdictional dispute and said prosecution was “completely inappropriate.” He said the agency is closely monitoring and evaluating its options.
The Arizona Attorney General today filed a criminal complaint against one of our registered exchanges related to prediction markets. This is a jurisdictional dispute and completely inappropriate as a criminal prosecution. The @CFTC follows this closely and evaluates the possibilities.
— Mike Selig (@ChairmanSelig) 17 March 2026
State officials in Arizona and elsewhere have argued that some of them look more like bets and should fall under state gaming rules.
That split is now at the center of a larger national battle involving various states, including New York, Tennessee and Massachusetts. Most government actions against Kalshi so far have been based on cease-and-desist orders, requests for injunctions or civil claims. Arizona’s case is moving forward by filing charges.
“It’s not at all surprising that states will bring new tools to bear in trying to cool the federally regulated markets,” Aaron Brogan, founder and managing attorney of Brogan Law PLLC, told CoinDesk. “Because there is a fundamental conflict between states, which regulate and derive tax revenue from state-regulated gambling markets, and these federally regulated markets that are outside of state control.”
For Brogan, the question is ultimately whether or not federal law applies, which means at the end of the day, “this is a dispute between the federal government and the state government, and that’s where it has to be decided.”
