Arkansas Attorney General sues Kalshi, calling it unregulated gambling
The office of Arkansas Attorney General Tim Griffin has filed a lawsuit against online prediction market operator Kalshi, alleging the platform operates an illegal, unlicensed gambling and sports betting operation targeting state residents.
The lawsuit contends that Kalshi misrepresents its event wagering contracts as legal financial trading while permitting underage users to place wagers without state regulatory approval, licensing, or tax compliance. Read more below.
The complaint was filed on Nov. 4, 2026, in the Circuit Court of Independence County against KalshiEX LLC and its parent company, Kalshi Inc. State attorneys assert that despite labeling its offerings as “event contracts” traded on a prediction market, Kalshi’s platform functions primarily as an unregulated sports betting and gambling system.
“Kalshi has built a global business that it calls a prediction market, allowing consumers to wager money on the outcome of just about anything,” Griffin said in a statement accompanying the filing.
“It doesn’t take a genius to understand that wagering money on whether the Razorbacks win or lose is gambling. And gambling on an unregulated platform is squarely prohibited by Arkansas law.”
The lawsuit states that Kalshi permits consumers to place financial wagers on college and professional athletic contests, election outcomes, pop culture events, and entertainment awards. The filing notes that under Amendment 100 to the Arkansas Constitution, sports wagering and casino gaming are strictly regulated under the oversight of the Arkansas Racing Commission, which restricts gambling activities to licensed operators and individuals 21 years of age or older.
The state alleges Kalshi violated the Arkansas Deceptive Trade Practices Act (ADTPA) by:
- Marketing its platform to consumers as “100% legal sports trading” and legal in all 50 states without obtaining required Arkansas casino gaming or sports pool licenses.
- Allowing individuals ages 18 to 20 to open accounts, deposit funds, and place wagers, bypassing the state’s legal gambling age minimum of 21.
- Failing to disclose that retail users frequently trade against sophisticated institutional market makers and professional traders who utilize proprietary data feeds and algorithmic models.
- Retaining transaction fees and revenue while operating outside state licensing, oversight, and taxation requirements.
The lawsuit asks the court to issue an injunction stopping Kalshi from offering unauthorized wagering contracts in Arkansas. Additionally, the Attorney General is seeking financial restitution for affected Arkansas consumers, civil penalties of up to $10,000 per violation under the ADTPA, recovery of unpaid state sales and use taxes, and court costs.
Kalshi has not yet filed a formal legal response in court.
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