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Cryptoprowl.com / The U.S. State of Arizona has filed criminal charges against prediction market Kalshi.

Arizona Attorney General Kris Mayes filed criminal charges against Kalshi, charging the prediction markets platform with operating an unlicensed gambling business.

The charges come after Kalshi offered election wagering in the state, actions the Attorney General's Office says violate Arizona laws.

Kalshi has been charged with 20 criminal counts, alleging the platform accepted bets from Arizona citizens on a wide range of events in violation of Arizona law, including sports and elections.

"Arizona law prohibits operating an unlicensed wagering business, and separately bans betting on elections outright," the attorney general said in a news release.

Prediction markets such as Polymarket are platforms that allow users to bet on anything and everything, from sports events and Oscar winners to elections and economic news.

The charges in Arizona run counter to the federal U.S. Commodity Futures Trading Commission (CFTC), which has signaled a supportive stance towards prediction markets.

The CFTC recently issued new guidance and launched a rulemaking process geared towards prediction markets.

To date, different courts have ruled in different ways on whether prediction markets are subject to state or federal laws in the U.S.

A federal judge in Nevada ruled in 2025 that Kalshi's sports-related contracts are subject to state gaming regulations.

But a Tennessee court ruled the other way earlier this year, temporarily blocking state regulators from enforcing a cease-and-desist order against Kalshi.

For its part, Kalshi says its event contracts are federally regulated derivatives contracts rather than gambling products that should be licensed by individual U.S. states.

News of the Arizona criminal charges come as prediction markets come under increasing fire from governments around the world.

Earlier on March 17, Argentina announced that it is banning rival prediction market Polymarket in the South American country, citing a need to protect consumers from gambling.