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Arizona Charges Kalshi With Illegal Gambling Operation 65

Posted by BeauHD from the legal-grey-area dept.
Arizona has filed criminal charges against Kalshi, accusing it of operating an illegal gambling business. "Kalshi may brand itself as a 'prediction market,' but what it's actually doing is running an illegal gambling operation and taking bets on Arizona elections, both of which violate Arizona law," Arizona Attorney General Kris Mayes said in a statement. The case could ultimately head to the Supreme Court to decide whether federal oversight by the Commodity Futures Trading Commission overrides state gambling laws. Bloomberg reports: While state regulators have taken steps to crack down on what they say is unlicensed betting on Kalshi's site, Arizona appears to be the first state to escalate to criminal charges. The charges cited in the complaint are misdemeanors, which carry less serious penalties than felonies. [...] Prediction market exchanges like Kalshi have said they should continue to be regulated by the US Commodity Futures Trading Commission despite opposition from some state officials, who argue the trading should come under state gambling laws.

Arizona's criminal complaint follows Kalshi's move last week to block the state's gaming department from taking enforcement action against the company. "These are the first criminal charges of any kind filed against Kalshi in any court in the United States, but it will likely be the first of several," said Daniel Wallach, a sports and gaming attorney.
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Arizona Charges Kalshi With Illegal Gambling Operation More

Arizona Charges Kalshi With Illegal Gambling Operation

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  • About damn time (Score:4, Insightful)

    by rsilvergun ( 571051 ) on Tuesday March 17, 2026 @07:15PM (#66046800)
    I am so tired of calling what are obvious gambling sites "prediction markets"

    I find it genuinely frightening that there's a real possibility these gambling sites will get away with calling themselves securities because of how corrupt our national government here in America has become. Our president has sold over 2,000 pardons for literally billions of dollars and he has a 40% approval rating...

    I don't even think the scale of corruption is something human beings can comprehend at this point. Never mind the illegal wars and the $5 billion dollars our president's son is on track to get from the companies that talked that President into invading Iran...

    I cannot understand how any politically aware person could continue to support any of this. How can you not understand that it's going to bite you in the ass real soon... Christ if you're retired and on a fixed income it's biting you in the ass right now with higher gas prices and in a few months those are going to filter into all the prices. Never mind the extra money you spent on all those tariffs...

    I can tell you that the extremely small tax cuts I got from the last round of reform didn't come close to making up for the cost of the tariffs. Because that was the point. The tariffs were used to offset huge tax cuts for the Epstein class that normally could not make it through Congress...

    And then there's the Epstein files... And credible proof that the president raped a 13-year-old. The facts have been verified by several small journalist outlets because the big guys have been told don't touch it or else.

    I mean I can go on and on and on about how every single institution designed to uphold the rule of law and protect you has collapsed and is failing. I get a lot of people aren't politically aware but for those that are how long do you think you can get away with all this?

    I mean it's a big club and you ain't in it
    • Honestly it's just as much gambling as trading bitcoin or stocks is. Pleas tell me how it's really different in any way?
      • Bitcoin doesn't generally provide perverse incentives for people to manipulate political events or assassinate political leaders so they can win bets online.

      • Honestly it's just as much gambling as trading bitcoin or stocks is.

        Bitcoin, yes, stocks, no. The difference with stocks is that you're buying something with actual, real-world value, a piece of a functioning company that makes real products and sells them to real customers. Yes, you're hoping that the company will be successful enough to pay you a nice stream of dividends from its profits or, equivalently, to go up in share price, but this is no different from buying any other potentially revenue-generating asset.

        When you put money into bitcoin or into a prediction mar

        • No, it is different than Bitcoin. In this case, "gambling" means "receiving a specified amount of money if a specific event occurs" (for example, receiving $1000 if Team A wins today's game). Buying Bitcoin doesn't meet the "specified amount of money" part of the definition, and "the price goes up" generally wouldn't be considered a specific enough event.

          Bitcoin would fit the common colloquial definition of gambling, but not this specific legal definition.
        • Honestly the stock market of today I would just as much consider gambling. There's all kinds of tech and AI companies significantly overvalued for what they have or can provide. When the bubble pops and it will there will be a lot of people loosing those bets.

    • Whats wild to me is a lot of Silicon Valley Tech Bro types actually treat these fucking things as genuine useful predictors, as if a bunch of gambling addicted basement folk somehow voltron up to form a giant soothsaying oracle..

      When I say to people that I think silicon valley has lost its goddamn mind, I encourage people to deep dive on TESCREAL and realise just how profoundly weird some of these people actually are. And they are in charge. And using weird gambling "prediction market" sites to make decisio

      • Re:About damn time (Score:5, Insightful)

        by swillden ( 191260 ) <shawn-ds@willden.org> on Tuesday March 17, 2026 @10:11PM (#66046992) Journal

        Whats wild to me is a lot of Silicon Valley Tech Bro types actually treat these fucking things as genuine useful predictors, as if a bunch of gambling addicted basement folk somehow voltron up to form a giant soothsaying oracle..

        If it were just "gambling-addicted basement folk" that would indeed be crazy. But the idea -- and the reality -- is that it attracts interest from serious and well-informed people who know stuff and do their research. And prediction markets do have a pretty good track record; they tend to outperform experts a lot of the time. They did much better than pundits or pollsters at predicting Trump's wins, just to name one example.

        • I'm not worried about serious well-informed people (Score:4, Insightful)

          by rsilvergun ( 571051 ) on Tuesday March 17, 2026 @10:57PM (#66047036)
          Anyone can become addicted to gambling but those people will usually eventually figure it out and seek help. Probably after losing a lot of money but before they are homeless.

          What I'm worried about is Young men. When it comes to gambling of this type young men are typically the main target because they don't know any better and it's easy to get them into bad habits because you do dumb shit when you're young especially when you're a man chock full of testosterone and something to prove.

          We already have several cases of dudes borrowing a shitload of money on credit cards before they realize what they've done.

          And even if you want to say fuck them you can't do that because those young men are going to cause all kinds of social problems when they get fucked over by these gambling houses. There is a damned good reason we heavily regulated and limited access to gambling.

          Fuck I wish people knew what a chesterton's fence was...
          • I love it when we agree.

            They've made it worse by basically taking over sports broadcasting. "Watch on FanDuel" means, watch in a gambling app, because if you aren't risking your savings on every play, you aren't enjoying sports! And that's a problem. They're trying to move public opinion to a place where enjoying sports equals gambling. We need to prevent that.

        • If I remember correctly predict it predicted trump losing in 2016 winning in 2020 and in 2024. Although the 2020 one predicted Biden until November 3rd when it switched to trump for 1 day, which was kinda funny. I still remember how pissy the people who lost that bet were.

        • If it were just "gambling-addicted basement folk" that would indeed be crazy. But the idea -- and the reality -- is that it attracts interest from serious and well-informed people who know stuff and do their research. And prediction markets do have a pretty good track record; they tend to outperform experts a lot of the time. They did much better than pundits or pollsters at predicting Trump's wins, just to name one example.

          Thats a lot of vague fuzzy words. But wheres the evidence?

        • And you thought that was different from any other handicapping (determining the odds of an event) done by sports bookies, at the racetrack, or any other kind of gambling? The OTB is littered with serious and well-informed people, desperately trying to recoup their losses.
      • And silicon Valley tech Bros are no different. You give somebody that much money and power and they get real stupid real fast. At best you have one generation of ruthless efficiency before the fail sons take over.

        Once you have that much money and power the process for keeping it is pretty well documented and pretty well known and you can easily teach it in the kind of schools the Epstein class sends their kids to.

        So you end up with people who are really good at holding on the money and power but not

      • as if a bunch of gambling addicted basement folk somehow voltron up to form a giant soothsaying oracle

        Big Money is now involved in prediction markets. They have far more access to information than the basement folk, they're addicted to increasing their wealth, and they have far more power to influence outcomes. The basement folk are the plankton that feed the whales.

        And since these markets are becoming good at predicting events, more people are understandably considering them a reliable source of info

    • Re: (Score:3, Insightful)

      by igreaterthanu ( 1942456 )
      There is a massive distinction between prediction markets and gambling. It is not the same thing at all. Notably, with prediction markets you are not betting against the house.
      • You think those so-called prediction markets arent making money off the betting that goes on. Thats so cute. Its good to see that theres still a tiny bit of wide-eyed innocence in this world. Never change, little buddy.

        • Re: (Score:3)

          by jonwil ( 467024 )

          For a traditional bookmaker, you win if the thing you bet on happens and the bookie wins if it doesn't happen.

          But for these prediction markets, the other side of the bet is some other punter, not the house. The prediction markets should in theory not care which outcome occurs since they should make the same money either way.

          • Re: About damn time (Score:4, Informative)

            by Jason Earl ( 1894 ) on Wednesday March 18, 2026 @01:00AM (#66047114) Homepage Journal

            That isn't even remotely true, at least not in any recent era. The way that bookmakers have made odds for hundreds of years has been to set the odds so that roughly the same amount of bets came in on both sides. The house makes their money from a fee that they take for setting up the bet. This is colloquially know as "vigorish [wikipedia.org], vig, or the juice."

            Read the article linked, it covers how this works mathematically.

            It might look like you are betting against the bookie, but the reality is that the bookie doesn't take the bet unless he has someone that is willing to take the other side of the bet, and the odds are set up so that whoever wins the money that they win is balanced by another group that lost that same amount plus a little more. That's why odds for future events would often change over time. if the bookmaker got too much interest on one side of the wager the odds would change to entice people to bet the other way. The vig guarantees that either way the house wins. That's literally what "bookmaking" means.

            In other words, historically bookmaking worked exactly like prediction markets, and it has worked this way forever. The difference is that in most of the world it generally has been illegal, because gambling is addictive and destructive. There's a reason that this sort of thing was basically universally illegal, and the reason is that societies that didn't put up these guardrails invariably failed.

      • They're going to turn into dust.

        You are putting up money with the expectation that if an event happens you will be paid out a great deal more money than you put up. Meanwhile the house here has structured the events to guarantee that they always come out significantly ahead financially.

        That's gambling. That's what we call gambling. That's the definition of gambling.

        And there are plenty of ways to gamble without betting against the house over in Las Vegas. These kind of bets have existed in Vegas
        • What definition of gambling do you have that wouldn't also apply to futures contracts?
          • You mean buying something in advance because you need to ensure future supply?

            Now, I realize you asked for a definition of gambling that excluded the futures market and I provided a definition of the futures market that excluded gambling, but I think it'll do.

            • That is a forward market which is different from a futures market. The definitions are strict.
              • Well, as I stand corrected may I then ask you what the answer is? If you know the definitions well, you should be best positioned to identify the key definitional differences between gambling and the futures market.

    • Re: (Score:1)

      by Anonymous Coward

      I am so tired of calling what are obvious gambling sites "prediction markets" I find it genuinely frightening that there's a real possibility these gambling sites will get away with calling themselves securities because of how corrupt our national government here in America has become.

      There is precedent. Uber and Lyft bought their way out of being considered a Taxi service (and regulated accordingly). by a combination of political contributions and ballot initiatives, even while they walked like a duck, and quaked like a duck (so were a taxi service). I expect sufficient (political) contributions by Kalshi will achieve their desired goals (i.e. profit from the stupid).

    • Re: (Score:2)

      by mjwx ( 966435 )

      I am so tired of calling what are obvious gambling sites "prediction markets"

      Blame Uber.

      They decided that they weren't going to be called an illegal taxi company (or employer) and claimed they were a "ride sharing" company. As no lawmakers have bothered rumbling this obvious lie, other businesses have realised they can get away with it. You're not running an illegal brothel, it's "body sharing", don't call it a speakeasy, it's "drink sharing" so you're clearly not running an illegal betting ring... it's a "prediction market".

      And those who demanded that Uber get a free pass bec

    • Re: (Score:3)

      by necro81 ( 917438 )

      I am so tired of calling what are obvious gambling sites "prediction markets"

      All I need is to refer to the classic movie Trading Places [imdb.com]. A couple of commodity brokers are explaining what they do [youtube.com] to a fresh-faced Eddie Murphy.

      Broker 1: "Some of our clients are speculating that the price of gold will rise in the future, and we have other clients who are speculating that the price of gold is going to fall, and they place their orders with us...."
      Broker 2: "Tell him the good part."
      Broker 1: "No matter whether our clients make money or lose money, [we] get the commissions."
      Eddie

    • If you were honest with yourself and let yourself examine the situation from a disinterested view, you would see that what is happening is/was inevitable. Human psychology is not that mysterious.

      The people who have managed to monopolize money are toddlers emotionally and mentally. It is the price to pay when you remove all challenges from your life. These are not sophisticated people, merely privileged. Some call themselves Republicans, some call themselves Democrats. They both worship at the altar of Mamm

  • The last thing I saw - (Score:3)

    by Travco ( 1872216 ) on Tuesday March 17, 2026 @07:55PM (#66046866)
    The people got better returns gambling on Sports and they did on Kalshi.
    Probably because they were betting on something that they half knew about.

  • Block accounts from the state (Score:5, Insightful)

    by gurps_npc ( 621217 ) on Tuesday March 17, 2026 @08:30PM (#66046920) Homepage

    Arizona can stop Arizonians from using the gambling web site, they cannot stop non-arizonians from betting on Arizona elections.

    • The trick that's being used here is that the gambling dens here are calling themselves markets that would be regulated by the same folks that oversee stock markets.

      That punts it up to the federal government where they are hoping the corrupt supreme Court can be used to essentially legalize gambling in states that normally wouldn't allow it. Basically the Federal law overriding state law.

      Sometimes states do have to get rulings that have effects outside of their states. There's no getting around it wh

  • Ride sharing is to taxi company as prediction market is to casino.

    • Re: (Score:2)

      by mjwx ( 966435 )

      Ride sharing is to taxi company as prediction market is to casino.

      A casino is an entertainment venue where there is often a lot more to do than gambling. A better analogy is that this is a dodgy bookmaker in a piss stained alley but with even less legal protection for the punters when things go wrong.

  • Don't stop at Kalshi (Score:3)

    by bobthesungeek76036 ( 2697689 ) on Wednesday March 18, 2026 @12:54PM (#66048002)
    I placed a "bet" on Robinhood this past weekend on the F1 race.

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