Arkansas attorney general sues Kalshi over alleged illegal gambling
Arkansas Attorney General Tim Griffin sued prediction market Kalshi on Wednesday, accusing the platform of operating as illegal gambling in the state. The lawsuit targets Kalshi's event-contract model and marks another state-level legal challenge as the platform expands into sports and other markets under its CFTC designation. Griffin also sued an Australian sweepstakes casino operator in separate filings. The action escalates state enforcement against event-contract platforms that lack state gaming licenses.
Griffin is explicitly copying the Utah template of treating CFTC-registered event contracts as plain gambling subject to state law. Each new state filing weakens the federal preemption shield that Polymarket and Robinhood also rely on. Kalshi must now defend parallel civil suits in Arkansas, Utah, Ohio, Tennessee, and Louisiana while felony criminal charges against co-founders Mansour and Lopes Lara proceed in Utah.
The first circuit split on preemption will likely reach the Supreme Court, where the NFL has already urged justices to back state gambling authority. A ruling against preemption would force every CFTC-registered platform to seek state gambling licenses or exit dozens of markets.