Kalshi CEO Takes Up Fight Against Arizona Criminal Charges, Claims 400,000 Users In State

By Bill Speros

Mar 18th, 2026 4:39 PM EDT

The battle between Arizona Attorney General Kris Mayes and Kalshi spilled across social media Wednesday. Arizona filed misdemeanor criminal charges against Kalshi earlier this week. It marked the first-in-the-nation criminal charges filed against a prediction market. Mayes accused Kalshi of running an unlicensed gambling operation and taking illegal bets on elections in the state.

Kalshi CEO Tarek Mansour posted on X Wednesday that "The rule of law applies to everyone - including state governments."

He went on to say the following:

The Arizona Attorney General’s charges are baseless and a clear overreach. It’s gamesmanship from a politician who’s up for reelection. The charges claim that putting money on “a contingent future event or occurrence” is illegal. If they can bring these criminal charges against Kalshi, they could do the same to traditional derivatives on CME and Nasdaq, from options trading, to interest rate swaps and grain futures.

This is exactly why federal law is not optional: states cannot override it for political maneuvers or special interests.

We filed suit in federal court against Arizona last week to address this directly. Instead of letting the federal court evaluate the case on the merits, the AG is attempting to subvert the appropriate judicial process by making an end run with sham charges in state court.

If this were about consumer protection, the state would focus on predatory practices of the gambling industry’s addiction-driven business model. Instead, a regulated exchange is being targeted to protect incumbents and prevent consumers from choosing.

Mansour previously posted "I believe in the rule of law" above a post by CTFC Chairman Mike Selig in response to the Arizona Attorney General's criminal filings.

"The Arizona Attorney General today filed criminal charges against one of our registered exchanges related to prediction markets. This is a jurisdictional dispute and entirely inappropriate as a criminal prosecution. The CFTC is is watching this closely and evaluating its options," Selig posted on X Tuesday.

Kalshi Has 400,000 Users In Arizona, CEO Says

Mansour's post on X claimed that Kalshi has 400,000 users in Arizona. or about 5% of the population. That may be the most interesting note from Mansour's reply.

But we have close to 400k customers in Arizona, about 5% of the state’s population and growing, and we will fight for them. We will not be intimidated and we will keep building.

Kalshi rarely shares user data concerning any particular state or jurisdiction.

In a legal filing from November 18 from its ongoing civil litigation against the Massachusetts attorney general, Kalshi said it has 46,000 accounts with Bay State addresses and 36,000 individual users. Kalshi, meanwhile, argued that it does not know if those users are in Massachusetts when they use the site. And that adding geolocation tools would cost the company tens of millions of dollars and take months to implement.

"Kalshi lacks a mechanism to identify which of its users are located in a particular state at any particular time," the filing said.

Kalshi, however, currently on the "Who is Screened or Blocked from Trading?" page on its site said it uses geolocation data as part of its integrity protections against insider trading concerning government employees.

Arizona AG Claims Kalshi Trades On 'War'

An interview Mayes did with KTAR in Phoenix on Tuesday also drew blowback from Kalshi officials.

"What we're seeing is this sort of kind of insane situation where these prediction markets are allowing betting on everything from elections to wars to who is going to is going to win the next Suns game," Mayes told KTAR.

That post drew a response from Kalshi spokesperson Elisabeth Diana on Kalshi.

"Kalshi doesn't offer war contracts. Our unregulated competitor does. It would nice if states got their facts right instead of spreading misinformation," she posted.

Kalshi's market on “Ali Khamenei out as Supreme Leader?” drew criticism from users and others because of his death forcing the market to settle. By law, U.S.-based prediction markets are not allowed to offer trades based on death.

'Illegal Gambling' Charges Enter Race For Attorney General

The fight with Kalshi has emerged as in issue the race for Attorney General in Arizona. Warren Petersen, who is running against Mayes, posted on X that he was "troubled" by the indictment.

"AG Mayes’s criminal actions echo the Biden Administration’s pursuit of regulation by enforcement against crypto companies, where federal bureaucrats tried to apply maximum pressure to put financial innovators out of business. Thankfully, the people spoke in the 2024 election, and America is now the crypto capital of the world," Peterson wrote..

The 20-count complaint, filed in Maricopa County Monday alleges Kalshi accepted wagers from Arizona residents on professional and college sporting events, player props, and political contests — including four counts of election wagering tied to upcoming events:

• 2028 U.S. presidential race
• 2026 Arizona governor's race
• 2026 Arizona GOP gubernatorial primary
• 2026 Arizona Secretary of State.

"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," Mayes said in a press release. "No company gets to decide for itself which laws to follow."

A Kalshi spokesperson sent the following response to bookies.com

Sadly, a state can file criminal charges on paper thin arguments. States like Arizona want to individually regulate a nationwide financial exchange, and are trying every trick in the book to do it. As other courts have recognized and the CFTC affirms, Kalshi is subject to federal jurisdiction. It's different from what sportsbooks and casinos offer their customers, and it should not be overseen by a patchwork of inconsistent state laws.

Kalshi Sued Arizona Last Week

Kalshi continues to maintain it operates as a federally regulated trading exchange and is a financial instrument, not a gambling platform. The company sued Arizona on March 12 in what Mayes characterized as a preemptive move to avoid accountability under state law. Kalshi also filed a motion for a preliminary injunction in Arizona federal court.

The move to file criminal charges upped the ante in comparison to the nearly dozen civil lawsuits Kalshi is facing in multiple state and federal courts across the nation.

According to legal analyst Daniel Wallach, Monday's complaint marks a development he says significantly raises the stakes ahead of an upcoming Ninth Circuit oral argument in the case.

Sports betting is legal and available online in Arizona, but operators like FanDuel and DraftKings meet state regulatory standards and pay state taxes to operate there. Arizona law also outright bans election wagering, regardless of how a platform classifies its contracts.

"Arizona will not be bullied into letting any company place itself above state law," Mayes said.

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