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Last week, on top of fielding lawsuits from numerous states – including California – prediction market firm Kalshi saw its legal troubles ramp up in Arizona and Nevada.
On March 17, Arizona Attorney General Kris Mayes levied criminal charges against Kalshi. The state contends the prediction market company is operating illegally in the state and specifically violating an Arizona law that bans wagering on elections.
Three days later, a Nevada judge granted a temporary restraining order against Kalshi, at the behest of the Nevada Gaming Control Board, for operating in the state without a gaming license.
AZ AG lays out case against Kalshi
In a press release, Mayes defended the move to file criminal charges against Kalshi.
“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. No company gets to decide for itself which laws to follow.”
The release outlined the specifies behind the complaint:
“The 20-count criminal information alleges that Kalshi accepted bets from Arizona residents on a wide range of events in violation of Arizona law. These events included professional and college sporting contests, proposition bets on individual player performance, and whether the SAVE Act would become law. Among the charges are four counts of 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.”
Kalshi had filed suit against Arizona the week before the state’s action, on March 12, in anticipation of the charges.
No March Madness for Kalshi in NV
Per Reuters’ coverage, Nevada Gaming Control Board Chair Mike Dreitzer said the board had to act.
“Prediction markets, to the extent they facilitate unlicensed gambling, are illegal in Nevada, and we have a statutory duty to protect the public.”
Kalshi has since ceased all operations in the Silver State. The prediction market giant is sidelined in the gambling mecca of the US during March Madness, one of the top sports wagering events of the year.
An April 3 hearing is scheduled to determine a longer-term ban on Kalshi’s operations in Nevada.
How cases could impact California
In the Golden State, the Blue Lake Rancheria, Chicken Ranch Rancheria of Me-Wuk Indians, and Picayune Rancheria of the Chukchansi Indians tribes were denied an injunction in November to halt Kalshi’s operations on tribal lands.
The tribes had invoked the Indian Gaming Regulatory Act and the state’s Tribal-State Gaming Compacts in the request, but the US District Court in Northern California sided with the prediction market firm.
According to lawyer Daniel Wallach, who follows gambling and prediction market cases closely, the Arizona case could possibly help the tribes’ case in California.
Wallach told NPR that Arizona’s action “raises the stakes considerably” in legal maneuvering against Kalshi.
“That ‘win the race-to-the-courthouse’ strategy has proven to be an effective tactic thus far … states have increasingly utilized state court enforcement actions as the first line of attack.”
Whether Arizona’s charges against Kalshi are replicated by other states remains to be seen, but it’s notable that two of California’s neighboring states have stepped into the fray against Kalshi so decisively.
The NPR story did note that prediction market overseer Commodity Futures Trading Commission Chair Michael Selig said the Trump administration will back them “as they battle state regulators, who have dragged Kalshi and Polymarket to court for allegedly skirting longstanding state gambling laws.”
