The Commodity Futures Trading Commission intervened to halt Arizona’s criminal prosecution of prediction market platform Kalshi. On Friday, the CFTC announced it obtained a temporary restraining order, effectively pausing the state’s legal action.
CFTC Chairman Michael S. Selig issued a statement condemning Arizona’s approach. “Arizona’s decision to weaponize state criminal law against companies that comply with federal law sets a dangerous precedent, and the court’s order today sends a clear message that intimidation is not an acceptable tactic to circumvent federal law,” Selig said.
Arizona Attorney General Kris Mayes had filed charges accusing Kalshi of operating an unlicensed illegal gambling business within the state. The CFTC’s move comes just days after a federal judge permitted Arizona’s case to proceed, as reported by Bloomberg.
The commission has also initiated lawsuits to prevent similar criminal cases from advancing in Connecticut and Illinois. This broader legal strategy underscores the CFTC’s intent to assert federal oversight over prediction markets.
Selig currently serves as the sole commissioner on the CFTC, following his confirmation in December and the departure of former acting chairman Caroline Pham. Pham left the commission to join crypto firm MoonPay.
Kalshi, led by CEO Tarek Mansour, now operates under a temporary reprieve as the legal battle between state and federal authorities unfolds. The outcome could set significant precedents for how prediction markets are regulated across the United States.
