Arkansas Attorney General Tim Griffin filed suit against prediction-market operator Kalshi on November 4, alleging it took bets from state residents without the licenses and oversight required by law. The case puts Arkansas among states contesting whether sports event contracts are federally regulated financial products or gambling subject to state rules.
The lawsuit, filed in Independence County Circuit Court as case number 32CV-26-717, names KalshiEX LLC and Kalshi Inc. as defendants. It alleges violations of the Arkansas Deceptive Trade Practices Act and challenges contracts tied to sports, elections and entertainment. “Arkansas law is concerned with substance, not semantics,” Griffin said.
The state says Kalshi let residents wager without gambling licenses, observe state restrictions or pay taxes required of authorized operators. It singles out users aged 18 to 20: Arkansas generally sets a minimum age of 21 for regulated casino gambling and sports betting, while Kalshi allows eligible users to open accounts at 18. The complaint calls the company a “pocket-sized bookie,” but no court has ruled on the allegations.
Griffin’s office also claims Kalshi did not adequately address financial and personal risks. It points to self-exclusion tools, deposit limits, trading breaks, the company’s partnership with the National Council on Problem Gambling and its promotion of addiction resources. The state links its concerns to alleged substantial losses and mental health difficulties, without establishing that Kalshi caused particular injuries. Arkansas seeks consumer restitution, civil penalties, unpaid taxes, an injunction and recovery of revenue it says Kalshi unjustly obtained through transaction fees and other charges.
The filing came days after Utah brought 14 criminal charges against Kalshi and co-founders Tarek Mansour and Luana Lopes Lara. The October 28 case followed an undercover investigation in which a state agent allegedly placed 12 sports wagers totaling $114.87. Utah prosecutors filed 13 felony counts and one misdemeanor; a separate civil suit filed October 20 seeks up to $61.2 million in alleged trading fees. Kalshi denies the criminal allegations and says its event contracts are derivatives governed by federal commodities law.
The Commodity Futures Trading Commission is also challenging state enforcement. On October 27, it sued Utah, arguing that Congress gave it exclusive authority over commodity derivatives, including qualifying event contracts on registered exchanges. Chairman Michael Selig said the CFTC had “the expertise and responsibility to defend its exclusive jurisdiction.” The agency said it had begun proceedings against nine other states and filed arguments in federal appellate courts. A federal appeals court previously ruled against Kalshi in Nevada, finding it had not shown sufficient grounds to block regulators from applying state gaming laws to its sports contracts.
Comments (0)
No comments yet. Be the first!