Arizona’s Case Against Prediction Market Kalshi Hit by Federal Court Halt

A criminal prosecution brought by Arizona Attorney General Kris Mayes against prediction platform Kalshi has run into a major unexpected obstacle.

The U.S. Commodity Futures Trading Commission (CFTC) announced Friday that it has secured a temporary restraining order, which blocks Arizona from continuing its criminal case against the company. Kalshi’s CEO Tarek Mansour is pictured above in accompanying coverage of the dispute.

“Arizona’s decision to weaponize state criminal law against companies that comply with federal law sets a dangerous precedent, and the court’s order today sends a clear message that intimidation is not an acceptable tactic to circumvent federal law,” CFTC Chair Michael S. Selig said in an official statement on the ruling.

While the CFTC is structured to have five sitting commissioners, Selig is currently the only active member of the body. The shakeup follows his confirmation to the chair role in December, and the departure of former acting chair Caroline Pham, who left the agency to join cryptocurrency firm MoonPay.

Arizona’s charges accuse Kalshi of operating an unlicensed illegal gambling business within the state. According to Bloomberg, the announcement of the temporary restraining order comes just two days after a separate federal judge cleared Arizona’s case to move forward with prosecution.

The action against Arizona’s case is not isolated. The CFTC has also filed separate lawsuits seeking to pause similar state-level cases against prediction markets in Connecticut and Illinois.