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Arizona regulators are drawing a clear line in the sand when it comes to unlicensed betting activity. The Arizona Department of Gaming (ADG) has formally cautioned licensed operators that working with companies offering event contract trading could threaten their status in the state.
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ADG Director Jackie Johnson outlined the regulator’s stance in a letter sent to all licensees. The letter included:
“If the Department believes that an entity related to a licensee is partnered with a company that is selling event contracts in a jurisdiction outside Arizona in violation of the laws of that jurisdiction, that might impact a licensing decision.”
The warning highlights growing regulatory attention on event contract trading, a practice that allows users to bet on outcomes like elections, market events, or even sports through contracts tied to results.
Sports betting is regulated in Arizona, but state laws do not currently address the legality of event contract trading. There has also been no litigation in Arizona courts to test its boundaries. Regulators, however, are making clear that partnerships with such companies carry risks for licensed operators.
Earlier this year, the ADG issued cease-and-desist letters to Kalshi, Robinhood, and Crypto.com, accusing them of offering sports betting in the state without a license. It also sent the same letters to other non-licensed sports betting operators.
Beyond enforcement, the ADG is also focusing on consumer awareness. On August 12, the department launched a statewide education campaign designed to highlight the dangers of unregulated gambling and provide resources for players. The initiative centers on protecting consumers and reducing gambling-related harm.