Arkansas sues Kalshi over alleged illegal gambling
Arkansas files lawsuit against Kalshi
Arkansas Attorney General Tim Griffin filed a lawsuit against Kalshi on Wednesday. Arkansas alleges that the company operates an illegal gambling platform in the state.
Kalshi is a prediction market platform, which means users can wager money on the outcome of future events. The lawsuit adds Arkansas to a growing list of states taking legal action against the company.
Allegations of illegal gambling and user harm
- Arkansas alleges Kalshi operates an illegal gambling platform in the state.
- Griffin says wagering on sports results is gambling under Arkansas law.
- Arkansas alleges the platform presents risks including excessive wagering, financial losses, depression, and other mental health harms.
- Kalshi has previously argued in other lawsuits that its products are derivatives, not gambling.
What Griffin said in his statement
Griffin said Kalshi has built a global business that allows users to wager on the outcome of "just about anything."
He said: "It doesn't take a genius to understand that wagering money on whether the Razorbacks win or lose is gambling." He added that such practice is "squarely prohibited" by Arkansas law.
Griffin also said: "Although Kalshi insists that its products are not gambling, its actions speak louder than its labels." He said Kalshi knows its platform presents "real, tangible risks to its users, including excessive wagering, financial losses, depression, and other mental health harms."
Kalshi's argument in other cases
Kalshi has previously argued in other lawsuits that its event contracts are derivatives regulated by the Commodity Futures Trading Commission, or CFTC. On that basis, the company has argued they are not subject to state gambling laws.
The Block said it reached out to Kalshi for comment on the Arkansas lawsuit. The source does not report a response from Kalshi.
Utah charges and CFTC lawsuits over jurisdiction
Last week, Utah filed criminal charges against Kalshi, CEO Tarek Mansour, and chief operating officer Luana Lopes Lara, accusing them of illegally promoting online gambling and letting an undercover agent place wagers. Those charges came after Utah sued Kalshi and two Susquehanna trading firms, alleging they operated an illegal gambling business in the state.
Meanwhile, the CFTC has sued at least 10 states, arguing the states were intruding on its jurisdiction over prediction markets.
CFTC Chair Michael Selig said: "Congress entrusted the CFTC to be the federal regulator with sole responsibility to oversee these markets." He said the CFTC would defend its exclusive jurisdiction over commodity derivatives.
What is confirmed and what remains disputed
The Arkansas lawsuit has been filed, and the allegations in it are confirmed as allegations made by the state. Whether Kalshi's platform is illegal gambling under Arkansas law is disputed, as Kalshi has argued its products are federally regulated derivatives. The source does not provide a court decision on the Arkansas case.
Sources
Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.