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Arkansas has joined a legal confrontation over prediction markets, suing Kalshi for offering unlawful gambling services. The case adds a challenge to a platform claiming its event contracts fall under federal commodities regulation.
Attorney General Tim Griffin filed a lawsuit on Wednesday against KalshiEX LLC and Kalshi Inc., accusing the companies of violating the Arkansas Deceptive Trade Practices Act. Griffin claims that Kalshi allows customers, aged 18 to stake money on sports and entertainment outcomes without meeting Arkansas gambling requirements.
“It doesn’t take a genius to understand that wagering money on whether the Razorbacks win or lose is gambling,” Griffin said. The complaint describes Kalshi as a ‘pocket-sized bookie,’ arguing that its prediction-market branding does not change the nature of its activities.
Arkansas is seeking restitution for consumers, financial penalties, taxes and an injunction. These remedies remain unproven.
The Arkansas action follows an escalation in Utah, where authorities filed 14 criminal charges against Kalshi and co-founders Tarek Mansour and Luana Lopes Lara.
Those charges followed a civil lawsuit. Arizona, Connecticut, Massachusetts, Michigan and Nevada have also pursued legal action or imposed restrictions involving the platform. These disputes expose disagreement over who has authority to oversee sports-related event contracts.
Kalshi argues that its contracts are financial derivatives regulated by the Commodity Futures Trading Commission, rather than wagers governed by individual state gambling laws. The CFTC has sued Utah, asserting that federal authorities possess exclusive jurisdiction over these contracts.
Arkansas, however, argues that state licensing, consumer protections and taxation requirements still apply. Griffin pointed to Kalshi's deposit limits, self-exclusion options and gambling addiction resources as evidence of wagering-related risks.
Griffin separately sued Australian company VGW in White County over platforms including Chumba Casino and Global Poker. That complaint concerns virtual ‘Sweeps Coins’ allegedly redeemable for cash.
Neither lawsuit establishes liability. Their outcomes could influence how regulators distinguish federally supervised prediction contracts from gambling products offered to consumers nationwide. The decisions may also shape future enforcement.
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