Arkansas Attorney General Tim Griffin sued Kalshi on Wednesday, alleging the prediction market runs an illegal gambling platform, CoinDesk reported. The complaint calls Kalshi a “pocket-sized bookie” and says it lets users as young as 18 bet on sports and entertainment. Griffin asks a judge to find a violation of the state’s deceptive trade practices act and to order restitution.
Griffin said: “It doesn’t take a genius to understand that wagering money on whether the Razorbacks win or lose is gambling.” He also sued VGW, the operator of Chumba Casino and LuckyLand, over its “Sweeps Coins.”
Arkansas is the latest in a growing list. Utah filed 14 criminal charges against Kalshi and co-founders Tarek Mansour and Luana Lopes Lara in late October. Arizona, Connecticut, Massachusetts, Michigan and Nevada have also filed charges, sued or restricted access. Meanwhile the Commodity Futures Trading Commission has sued Utah, arguing that “only Washington can regulate these contracts.”
Kalshi maintains that its sports contracts are federally regulated derivatives, not gambling, and did not respond to CoinDesk’s request for comment. The clash between state gambling law and federal derivatives oversight is likely to be settled in court, and its outcome will shape how prediction markets, including those tied to crypto, can operate in the United States.
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