Federal judge blocks Arizona gambling law on Kalshi in federal-state authority clash
Federal Judge Michael Liburdi has blocked Arizona from applying its state gambling laws to prediction market platforms, ruling that event contracts listed on federally regulated designated contract markets (DCMs) are classified separately from gambling products. In a decision described as a clash between two competing authorities, Liburdi prevented Arizona regulators from treating Kalshi's event contracts as subject to state gaming restrictions. The ruling limits the state's ability to enforce gambling restrictions against federally regulated prediction market platforms operating within Arizona.
Hands Kalshi its second federal preemption win in five days, after the CFTC joined its Ohio case, giving Mike Selig's litigation strategy momentum before parallel fights in Wisconsin, Pennsylvania, and Minnesota. A binding circuit precedent from either Arizona or Ohio would arm the CFTC's suits against those three states.
Joins the CFTC's amicus-backed Ohio suit, Pennsylvania's gambling-classification clash, and Minnesota's proposed ban in a multi-front federal-preemption fight that now spans five state jurisdictions.