{"id":577944,"date":"2026-04-11T13:12:09","date_gmt":"2026-04-11T13:12:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/577944\/"},"modified":"2026-04-11T13:12:09","modified_gmt":"2026-04-11T13:12:09","slug":"judge-rules-in-favor-of-commission-in-battle-with-arizona-over-predictive-market-operators","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/577944\/","title":{"rendered":"Judge rules in favor of commission in battle with Arizona over predictive market operators"},"content":{"rendered":"

PHOENIX (AP) \u2014 A federal judge on Friday temporarily barred Arizona from enforcing its gambling laws against predictive market operators and put the brakes on a criminal wagering case<\/a> that the state has filed against Kalshi.<\/p>\n

U.S. District Judge Michael Liburdi\u2019s ruling means a Monday arraignment hearing for Kalshi has been called off. State prosecutors allege Kalshi is running an illegal gambling operation. The order was issued in a lawsuit filed by the Trump administration.<\/p>\n

The judge\u2019s order said the federal Commodity Futures Trading Commission had sufficiently shown that \u201cevent contracts\u201d fall within the Commodity Exchange Act\u2019s definition of \u201cswaps,\u201d and that it had demonstrated a reasonable chance of success in showing that the act preempts Arizona law.<\/p>\n

\u201cThe Act grants the CFTC \u2018exclusive jurisdiction\u2019 over the regulation of \u2018swaps,\u2019\u201d traded or executed on a Designated Contract Markets, the order said.<\/p>\n

Kalshi operates by allowing customers to buy and sell \u201cYes\u201d or \u201cNo\u201d contracts tied to the probable outcome of an event.<\/p>\n

The commission had sued Arizona in response to cease-and-desist letters sent to Kalshi from state gambling regulators and the criminal charges filed against the prediction market operator. The commission argued Arizona is intruding on its exclusive federal power to regulate national swaps markets.<\/p>\n

Liburdi had previously denied<\/a> Kalshi\u2019s attempt to bar prosecutors from moving forward with the case and declined a request from the company for a ruling saying federal law trumps Arizona\u2019s gambling laws. Liburdi said it was too early in the case for him to rule on that issue.<\/p>\n

State prosecutors have charged Kalshi with 20 misdemeanor counts of wagering for allegedly accepting bets on political outcomes, college sports and individual player performance.<\/p>\n

Arizona, the first state to file criminal charges against Kalshi, prohibits operating an unlicensed wagering business and betting on elections. The criminal charges mark a new front in a high-stakes legal battle over whether prediction markets should be subject to the same rules as gambling companies.<\/p>\n

Kalshi maintains it\u2019s a financial marketplace rather than a gambling operation and should only have to answer to the federal Commodities Futures Trading Commission, not the state of Arizona.<\/p>\n

\u201cThe attorney general\u2019s office disagrees with the court\u2019s ruling and we will evaluate our next steps,\u201d said Richie Taylor, a spokesperson for the Arizona Attorney General\u2019s Office. <\/p>\n

Robert DeNault, head of enforcement at Kalshi, said in a posting on X that the ruling is \u201ca step in the right direction.\u201d <\/p>\n

\u201cArizona\u2019s decision to weaponize state criminal law against companies that comply with federal law sets a dangerous precedent,\u201d Michael Selig, chairman of the Commodity Futures Trading Commission, said in a statement. \u201cAnd the court\u2019s order today sends a clear message that intimidation is not an acceptable tactic to circumvent federal law.\u201d<\/p>\n

Kalshi has said its product is different from gambling operations because Kalshi\u2019s customers engage in \u201cswaps\u201d between one another instead of betting against the \u201chouse.\u201d<\/p>\n

In a lawsuit filed just days before prosecutors leveled the criminal charges, Kalshi argued federal law trumps Arizona\u2019s efforts to subject it to state statute. It also contends that shutting down its ability to offer event contracts would threaten its viability, undermine confidence in the integrity of its platform and cause other problems for the business.<\/p>\n

The company said Arizona filed the charges to interfere with its lawsuit.<\/p>\n

Lawyers for the state contend Kalshi has marketed itself as a platform for sports and election betting and that Arizona should be able to enforce its gambling laws to hold Kalshi accountable for flouting state law.<\/p>\n

Kalshi sued Arizona, Utah and Iowa in attempts to stop anticipated state actions against the platform. Other states have taken some form of legal action against Kalshi.<\/p>\n

So far, the outcomes have been mixed. Federal and state judges in Nevada and Massachusetts, respectively, issued early rulings in favor of states looking to ban Kalshi and its competitor Polymarket from offering sports being in their states, while federal judges in New Jersey and Tennessee have ruled in favor of Kalshi.<\/p>\n

Earlier this month, the federal government filed lawsuits<\/a> against Connecticut, Arizona and Illinois challenging their efforts to regulate prediction market operators.<\/p>\n

The Trump administration has so far backed the platforms.<\/p>\n

President Donald Trump\u2019s eldest son is an adviser for both Kalshi and Polymarket and an investor in the latter. Trump\u2019s social media platform Truth Social is also launching its own cryptocurrency-based prediction market called Truth Predict.<\/p>\n","protected":false},"excerpt":{"rendered":"PHOENIX (AP) \u2014 A federal judge on Friday temporarily barred Arizona from enforcing its gambling laws against predictive…\n","protected":false},"author":2,"featured_media":577945,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27],"tags":[1017,3830,28,12,15363,793,3073,3130,2221,253786,253789,111,253788,253787,74,795,792],"class_list":{"0":"post-577944","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-arizona","9":"tag-az-state-wire","10":"tag-business","11":"tag-donald-trump","12":"tag-gambling","13":"tag-general-news","14":"tag-indictments","15":"tag-lawsuits","16":"tag-legal-proceedings","17":"tag-michael-liburdi","18":"tag-michael-selig","19":"tag-politics","20":"tag-richie-taylor","21":"tag-robert-denault","22":"tag-technology","23":"tag-u-s-news","24":"tag-united-states-government"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/577944","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=577944"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/577944\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/577945"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=577944"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=577944"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=577944"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}