Arizona Attorney General Pursues Criminal Charges Against Online Gambling Site Kalshi

A federal judge has allowed Arizona Attorney General Kris Mayes to continue prosecuting an online gambling company for violating state gaming laws, even as the company argues that federal regulations shield its operations.

In a detailed 15-page ruling issued late April 8, U.S. District Court Judge Michael Liburdi denied an injunction request from Kalshi, a prediction market platform that lets people bet on events ranging from sports outcomes to political races and weather patterns.

The judge acknowledged a legal conflict between Kalshi and the state over which laws take precedence but said he would allow Attorney General Mayes to continue pressing charges for the moment.

What is Kalshi?

Kalshi operates an online platform where Arizonans can place wagers on a wide variety of events. Customers can bet on what they think will be the rate of U.S. tariffs on China by July 1, how high unemployment numbers will rise, whether Dune Part Three will win an Oscar, and many other contingent events.

The price of buying what Kalshi calls a swap fluctuates depending on how many people bet on an individual outcome.

The Legal Battle

Kalshi contends that its activities are regulated by the federal Commodity Futures Trading Commission, which the company says trumps arguments by Mayes that state laws allow only regulated entities to take wagers and only on sporting events.

The company asked Judge Liburdi to issue an injunction barring the state from pursuing the 20 criminal charges Mayes brought against Kalshi.

Liburdi said it is premature for him to rule on what constitutes a swap under the federal Commodity Futures Act. The ruling involves determining whether various events Kalshi customers can wager on fall under that federal definition.

The judge explained that the Anti-Injunction Act prevents federal courts from blocking proceedings in state court except in narrow exceptions. Liburdi said that act applies as long as there is a case in state court, which remains the case here.

Federal Intervention

The Community Futures Trading Commission has filed its own suit in federal court, now consolidated with Kalshis original lawsuit. The agency is siding with the company and urging Liburdi to rule that any action by the Attorneys Office is preempted by federal law.

Liburdi agreed to hear arguments from CFTC attorneys that they are entitled to block Mayes case, even if Kalshi is not. The judge said that for the moment, the Trump administrations intervention does not change his belief that Mayes is free to pursue Kalshi in state court.

The Charges

Kalshi faces its first hearing April 13 in Maricopa County Superior Court.

Mayes has charged Kalshi with four counts of illegal wagering on elections, all based on bets filed by an investigator from her office between December 2025 and February 2026. One of those involves whether Andy Biggs would win the Republican Party primary in his bid for governor.

A spokesman for Mayes declined to say which way the investigator bet but said each of those election wagers carries a maximum penalty of $10,000.

The remaining 16 counts involved sports bets, ranging from the outcome of a women basketball game between Arizona State University and the University of Arizona to whether Devin Booker would score more than 25 points in a specific game between the Phoenix Suns and the Indiana Pacers.

Each carries $20,000 penalties.

Next Steps

Mayes lawyers said late April 8 that they were analyzing the ruling. But they believe the court made the right decision.

There was no immediate response from Kalshi.