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A federal judge has temporarily stopped Arizona from pursuing its criminal case against Kalshi, handing the prediction market company a short-term court win after the CFTC stepped in.
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Arizona looked set to keep pressing ahead against Kalshi. Instead, the case has been paused, at least for now, after the CFTC won a temporary restraining order blocking the state from continuing its criminal action.
The state had accused Kalshi of operating an illegal gambling business without a license. Bloomberg reported earlier in the week that a federal judge had allowed the Arizona matter to keep moving, making the later restraining order a quick turn in the fight.
CFTC Chairman Michael S. Selig framed the ruling as a warning to states trying to use local criminal law against federally regulated prediction market firms. “Arizona’s decision to weaponize state criminal law against companies that comply with federal law sets a dangerous precedent, and the court’s order today sends a clear message that intimidation is not an acceptable tactic to circumvent federal law,” he said.
The Arizona dispute is not sitting on its own. The CFTC has also sued to stop similar state actions in Connecticut and Illinois, arguing that event contracts listed on federally regulated markets fall under federal oversight, not a patchwork of state gambling rules.
For Kalshi, the order does not end the case. It only buys time. Still, after criminal charges in Arizona and fresh pressure from several states, even a temporary halt is a meaningful break in one of the toughest fights around prediction markets in the US.