Arizona AG Seeks To Restart Legal Fight Against Kalshi

Arizona Attorney General Kris Mayes is asking the Ninth Circuit Court of Appeals to dissolve a trial court order that currently blocks her from prosecuting prediction market operator Kalshi under Arizona's gambling laws.

The push follows an August 28 Ninth Circuit ruling in a related case, KalshiEX, LLC v. Assad (No. 25-7516), which Mayes argues is materially similar to her own dispute with Kalshi and should therefore produce the same result.

Mayes contends that the two cases are close enough that the same legal reasoning must apply, and she is now seeking a rehearing to overturn the injunction that currently prevents Arizona from taking enforcement action against the company.

The underlying dispute centers on whether Kalshi's event-based contracts, including those tied to sports outcomes, constitute unlicensed gambling products under Arizona state law, or whether they fall under federal oversight as regulated derivatives, which would place them entirely outside state gambling regulators' reach.

Wider Context

Kalshi and other prediction market operators have faced a wave of state-level challenges over whether their sports-related contracts constitute de facto sports betting, an issue playing out in parallel disputes across multiple states.

A win for Mayes would allow Arizona to resume its own enforcement against Kalshi; if the Ninth Circuit declines to revisit the injunction, Arizona's gambling regulators would remain unable to act against the company while the underlying question of state-versus-federal jurisdiction over prediction markets continues to be litigated elsewhere.

No hearing date had been set on Mayes' request as of the filing. The case is being closely watched across the sports betting and prediction-market industries.