Arkansas Attorney General Sues Kalshi, Saying Bets on Razorbacks Games Are Gambling

Arkansas Attorney General Tim Griffin has sued KalshiEX LLC and Kalshi Inc., the companies behind the prediction market Kalshi, arguing that the platform operates an unlicensed gambling business in the state.
Griffin announced the lawsuit on Nov. 4, saying the state is seeking restitution, penalties, taxes and injunctive relief under the Arkansas Deceptive Trade Practices Act. He said that “wagering money on whether the Razorbacks win or lose is gambling,” and that state law “is concerned with substance, not semantics.”
The consumer protection angle is one that critics of state actions have pushed back on. Jacob Robinson, host of the Law of Code podcast, said on Unchained’s DEX in the City in August that prediction market users “are citizens of the exact states that are going after these prediction markets in the name of consumer protection, even though there are already regulated gambling platforms.”

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Kalshi’s Own Safeguards Cited
Griffin said Kalshi never obtained an Arkansas gambling license or paid the state’s gambling taxes, yet let people “as young as 18 years old” bet on sports and entertainment.
He argued that Kalshi’s product design undercuts its position. The platform gives users self-exclusion options, deposit limits and trading breaks, and it promotes its partnership with the National Council on Problem Gambling. “Although Kalshi insists that its products are not gambling, its actions speak louder than its labels,” Griffin said in the release, adding that the company knows its users face risks ranging from heavy wagering and money losses to depression.
Pressure From Other States
Kalshi is a designated contract market regulated by the CFTC, the federal derivatives regulator.
The Arkansas case follows criminal charges that Utah brought last week against Kalshi, CEO Tarek Mansour and COO Luana Lopes Lara. The CFTC, for its part, has taken legal action against at least 10 states as it defends its authority over the contracts.
Related Listen: Bits + Bips: Is Kalshi Headed to the Supreme Court Next?

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