Arizona Attorney General Chris Mays has filed criminal charges against prediction market platform Kalsi for allegedly operating an illegal gambling operation without a license in the state and engaging in election gambling.
A 20-count complaint filed Tuesday in Maricopa County Court accuses the company of engaging in unlicensed gambling operations, alleging that the site “accepted wagers from Arizona residents on a wide range of events,” including state elections, a practice that is illegal in Arizona. The complaint charges Carsi with four counts of election gambling for accepting bets from Arizona residents regarding the 2028 presidential election, the 2026 Arizona gubernatorial election, the 2026 Arizona Republican gubernatorial primary, and the 2026 Arizona Secretary of State election.
According to AZ Mirror, this is the first time the state has brought such charges against the company and marks a significant escalation in the conflict between the state and the prediction market industry.
“Carsi may call himself a ‘prediction market,’ but what he is actually doing is operating an illegal gambling operation and betting on Arizona elections, both of which violate Arizona law,” Attorney General Mays said in a statement. “No company can decide for itself which laws to follow.”
It’s worth noting that this charge is technically a misdemeanor. They come after a small spike in cease-and-desist letters, lawsuits and other official actions from states over Kalsi’s operations, with many officials accusing Kalsi of circumventing state gaming laws.
On the contrary, prediction sites like Calsi argue that they are not violating state law because they are subject to federal regulation by the Commodity Futures Trading Commission.
Kalsi may be under attack from the left, right and center, but the company has also taken its own, often pre-emptive, legal actions.
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Mr. Carsi filed a complaint against the Arizona Gaming Authority in federal court on March 12th. The company’s lawsuit alleged that Arizona’s regulatory efforts violate “the federal government’s exclusive authority to regulate derivatives trading on exchanges.” Kalsi also recently sued Iowa and Utah on similar grounds.
Mays’ office claims the company is simply trying to avoid accountability.
“Carsi has made a habit of suing states rather than following the law. In the past three weeks alone, the company has filed lawsuits against Iowa, Utah, and now Arizona,” Mays said in a statement. “Rather than working within the legal framework established by a state like Arizona, Kalsi is going to federal court to try to escape responsibility.”
Elizabeth Diana, Karsi’s communications director, said Arizona’s criminal charges were “seriously flawed” and a matter of “ruse” related to the company’s own lawsuit against the state.
“Four days after Kalsi filed her lawsuit in federal court, these charges were brought to avoid federal court and shorten the normal judicial process,” Princess Diana said. “They seek to prevent federal courts from evaluating this case on the merits, namely whether Kalsi is subject to exclusive federal jurisdiction. These charges are without merit and we look forward to fighting them in court.”
Federal officials have indicated they are siding with the forecasting industry, which could lead to a regulatory showdown between state and federal officials. Commodity Futures Trading Commission Chairman Michael Selig recently published an op-ed in the Wall Street Journal accusing states of “launching a legal assault on the CFTC’s authority to regulate” these sites. Selig also insisted that the agency will no longer “stand idly by” as “overzealous state governments” undermine the agency’s “exclusive jurisdiction” over the industry.
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