Kalshi co-founder Tarek Mansour called Arizona’s criminal case against the company a “total blowout,” casting the move as an attack on a federally regulated exchange rather than a standard gambling law enforcement action.
Mansour said the charges “have nothing to do with gambling or the merits” and argued that Arizona is trying to avoid a broader court fight over who controls the prediction markets. Speaking to Bloomberg, he said Kalshi will continue to defend the business even as the legal battle expands.
Kalshi did not respond to CoinDesk’s request for comment.
Arizona Attorney General Kris Mayes filed 20 criminal charges against Kalshi this week, accusing the company of operating an illegal gambling business and offering election betting in the state.
His office said Arizona law prohibits both unlicensed gambling operations and election betting.
Kalshi allows users to trade contracts tied to real-world outcomes, such as elections, sports, and economic data. The company says those products are event contracts overseen by the Commodity Futures Trading Commission (CFTC), which recently signaled a more supportive federal stance toward these platforms. Kalshi, along with Polymarket, accounts for the majority of prediction market activity, with more than 90% of theoretical volume, according to Dune data.
In a social media post, CFTC Chairman Mike Selig called the matter a jurisdictional dispute and said criminal prosecution was “completely inappropriate.” He said the agency is watching closely and evaluating its options.
The Arizona Attorney General today filed criminal charges against one of our registered exchanges related to prediction markets. This is a jurisdictional dispute and totally inappropriate as a criminal proceeding. He @CFTC is watching this closely and evaluating its options.
– Mike Selig (@ChairmanSelig) March 17, 2026
State officials in Arizona and elsewhere have argued that some of it looks more like gambling and should be subject to state gambling rules.
That division is now at the center of a broader national fight involving several states, including New York, Tennessee and Massachusetts. Most state actions against Kalshi so far have been based on cease-and-desist orders, requests for injunctive relief or civil lawsuits. The Arizona case goes further by filing criminal charges.
“It is not at all surprising that states are bringing new tools to try to cool down federally regulated markets,” Aaron Brogan, founder and managing attorney at 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, meaning that at the end of the day, “this is a dispute between the federal government and the state government and that’s where it should be determined.”
