Griffin Sues Kalshi, Alleging Illegal Gambling in Arkansas

Arkansas Attorney General Tim Griffin announced Wednesday that he has sued the companies behind prediction market Kalshi, alleging the platform offers illegal gambling to Arkansas consumers.

The lawsuit names KalshiEX LLC and Kalshi Inc. Griffin said he is seeking restitution, penalties, taxes and injunctive relief for alleged violations of the Arkansas Deceptive Trade Practices Act.

Kalshi allows users to trade contracts tied to the outcomes of events, including elections, sporting events and entertainment competitions. Griffin argues that the activity amounts to gambling under Arkansas law, regardless of how the company describes its products.

“Arkansas law is concerned with substance, not semantics, and in Arkansas, gambling is regulated to protect consumers,” Griffin said.

State Alleges Platform Bypassed Gambling Requirements

Griffin accused Kalshi of opening its platform to Arkansas consumers, including people as young as 18, without obtaining the licenses, complying with the restrictions or paying the taxes required of lawful gambling operators in the state.

He said the companies encouraged consumers to wager money on sporting and entertainment events and profited from those transactions.

Griffin also pointed to features such as self-exclusion tools, deposit limits and trading breaks, arguing that they resemble safeguards used by gambling operators. He cited the company’s promotion of gambling addiction resources and its partnership with the National Council for Problem Gambling.

The attorney general said the platform poses risks that include excessive wagering, financial losses and mental health harms.

Kalshi Cites Federal Regulation

Kalshi describes itself as a financial exchange. In its published explanation of its regulatory status, the company says it is regulated by the U.S. Commodity Futures Trading Commission as a designated contract market.

That federal oversight is separate from Griffin’s allegation that the platform violates Arkansas gambling and consumer protection laws. The allegations in the state’s lawsuit are civil claims, not findings by a court.

A copy of the lawsuit is available here.