- Arkansas alleges Kalshi offered unlicensed gambling through its prediction-market platform.
- The state seeks restitution, civil penalties, unpaid taxes and an injunction.
- The CFTC maintains that federal derivatives oversight takes precedence over state enforcement.
Arkansas filed a Kalshi lawsuit on November 4, alleging the prediction-market operator offered illegal gambling to state residents. Attorney General Tim Griffin seeks restitution, penalties, taxes and an injunction under the Arkansas Deceptive Trade Practices Act. The civil case adds to a widening dispute over whether sports event contracts fall under state gambling laws or federal derivatives oversight.
Kalshi Lawsuit Challenges Sports Contracts and User Age Rules
Griffin’s announcement argues that wagering on sporting outcomes constitutes gambling regardless of the product’s label. He alleges the company accepted Arkansas customers without meeting state licensing, oversight and tax requirements.
The Kalshi lawsuit also highlights access for users as young as 18. Arkansas’s complaint contrasts that access with its minimum age of 21 for casino gaming and sports wagering.
The state cites self-exclusion features, deposit limits and trading breaks as evidence supporting its characterization of the business. Griffin also points to the platform’s promotion of gambling-addiction resources.
These remain allegations, not findings of unlawful conduct. The court has not awarded the requested restitution and penalties. The filing seeks a court declaration that the company violated state consumer-protection law.
Federal Oversight Dispute Expands as States Pursue Enforcement
The Arkansas Kalshi lawsuit joins a broader contest over regulatory authority. In other proceedings, the company has argued that its event contracts are federally regulated derivatives, rather than state-regulated bets.
The CFTC supports federal control over registered prediction markets. On October 27, it sued Utah to block enforcement against registered exchanges, citing its claimed exclusive jurisdiction.
The agency said it had initiated proceedings against nine other states. Chairman Michael Selig maintained that Congress assigned the CFTC responsibility for overseeing these markets. That position is part of the ongoing litigation, rather than a nationwide court resolution.Â
The Kalshi lawsuit was filed in Independence County Circuit Court, with Arkansas requesting a jury trial. Arkansas Advocate reported that a company spokesperson had not responded to its request for comment by publication.
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