Arkansas AG sues Kalshi over alleged illegal gambling platform

Arkansas Attorney General Tim Griffin sued KalshiEX LLC and Kalshi Inc. on 4 November, alleging that the companies operate an illegal gambling platform in Arkansas. In an official statement, Griffin said Kalshi lets consumers wager real money on elections, reality television, football and other events, including sporting and entertainment outcomes, without the licences required for lawful gambling operators.

The suit alleges multiple violations of the Arkansas Deceptive Trade Practices Act. Griffin is seeking restitution for consumers, civil penalties, unpaid taxes and injunctive relief. The filing is an allegation, not a final finding that Kalshi violated Arkansas law.

Griffin’s allegations

Griffin says Kalshi opened its platforms to Arkansas consumers, including people aged 18, encouraged them to wager on sporting and entertainment events, and profited from those wagers. He alleges the company did not obtain gambling licences, submit to state oversight, comply with applicable restrictions or pay the taxes required of lawful gambling operators.

“Arkansas law is concerned with substance, not semantics,” Griffin said, rejecting Kalshi’s description of its products as prediction markets rather than gambling. He pointed to Kalshi’s self-exclusion tools, deposit limits, trading breaks and gambling-addiction resources as evidence that the company recognises the risks associated with its products.

Griffin alleges that the platform exposes users to excessive wagering, financial losses, depression and other mental-health harms.

For operators offering event contracts, the case puts state licensing and consumer-protection exposure alongside the question of how the products are labelled. Griffin’s position is that Kalshi’s controls and terminology do not remove the need to comply with Arkansas gambling requirements when consumers are wagering money on event outcomes.

Part of a wider state challenge

The Arkansas action follows lawsuits by the Utah and New York attorneys general against Kalshi. Utah sued Kalshi on 21 October, alleging that its prediction-market bets constitute illegal gambling under Utah law, while New York’s Attorney General sued KalshiEX on 31 July over an alleged unlicensed gambling operation. On 29 October, the California Attorney General said California had joined a 37-attorney-general brief supporting Utah and opposing Kalshi’s federal pre-emption claim.

Michigan has also secured a state-court preliminary injunction against KalshiEX, according to the Michigan Gaming Control Board. The board said the state has separately obtained agreements or court orders halting sports-related event contracts from Kalshi, Robinhood, Coinbase and Polymarket. Its latest agreement requires Polymarket US to stop offering new sports contracts to Michigan customers and close remaining positions by 25 November.

The Arkansas Attorney General’s stated remedies include restitution, penalties, taxes and an injunction governing Kalshi’s conduct in the state.