Arkansas sues Kalshi over alleged unlicensed gambling products

Key points

• Arkansas Attorney General Tim Griffin filed the suit on 4 November against KalshiEX LLC and Kalshi Inc. under the Arkansas Deceptive Trade Practices Act.
• The state seeks an injunction, consumer restitution, disgorgement and civil penalties of up to $10,000 per violation.
• Utah, Missouri, Tennessee and New York have brought similar allegations, while the CFTC claims exclusive authority over prediction markets.

Arkansas has sued Kalshi over alleged unlicensed gambling products, accusing the prediction market platform of offering event contracts that amount to sports betting and casino gaming without a state licence.

Griffin argues the products are gambling whatever they are called, pointing to wagers on whether the Razorbacks win or lose. The state also alleges Kalshi let underage users onto the platform, below Arkansas's 21-year age limit for such activity, and misled customers by presenting its services as regulated and legal while omitting risks such as insider trading.

Arkansas wants an injunction to stop Kalshi operating in the state, restitution for customers who lost money, disgorgement of funds gained through unjust enrichment, and civil penalties of up to $10,000 per violation. It also seeks unpaid taxes and the costs of the lawsuit.

The case adds to a wider fight over whether event markets count as gambling. Utah, Missouri, Tennessee and New York have made similar allegations, and the Commodity Futures Trading Commission, which says it has exclusive jurisdiction over prediction markets, has sued some states. A coalition of 44 state attorneys general has disputed that federal authority.

What to watch: The article reports no scheduled hearing or ruling; Arkansas is seeking an injunction to halt Kalshi's operations in the state.

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