Judge permanently blocks Arizona's criminal prosecution of Kalshi on federal preemption grounds
U.S. District Judge Michael Liburdi granted Kalshi a permanent preliminary injunction blocking Arizona Attorney General Kris Mayes from prosecuting the CFTC-regulated prediction market platform on criminal gambling and election wagering charges. The ruling, issued in the U.S. District Court for the District of Arizona, reverses an earlier decision and affirms that Congress gave the Commodity Futures Trading Commission exclusive authority over federally regulated markets, preempting state-level enforcement. The decision permanently halts what sources described as an unprecedented state criminal case against a prediction market operator, with Liburdi explicitly rejecting Arizona's attempt to treat prediction markets as gambling operations rather than federally overseen financial instruments.
Shields Kalshi from the highest-stakes enforcement threat it faced nationwide—criminal prosecution—eliminating the risk of executive liability and freeing the platform to expand election and event contracts without posting state-by-state legal reserves.