DOJ and CFTC Seek Court Order to Halt Arizona Action Against Kalshi

The US Department of Justice (DOJ) and the Commodity Futures Trading Commission (CFTC) have asked a federal court to block Arizona from enforcing state gambling laws against prediction market platform Kalshi. Federal regulators argue that the company’s event contracts qualify as financial swaps under the Commodity Exchange Act and therefore fall under the CFTC’s exclusive jurisdiction.

The filing claims Arizona’s enforcement effort unlawfully interferes with federally regulated markets. If the request is approved, Arizona would be prevented from applying state gambling rules to prediction markets operating as federally regulated event-contract platforms.

Arizona Charges and Federal-State Legal Clash Intensify

Arizona Attorney General Kris Mayes previously filed charges on March 17, accusing companies linked to Kalshi of operating an illegal gambling business without a state license and offering election wagering services. An arraignment related to the case is scheduled for April 13.

The dispute highlights a broader legal conflict over whether prediction markets should be governed by federal commodities law or state gambling regulations. More than ten states have already taken legal action against similar platforms, signaling growing regulatory pressure across the sector.

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