Arizona has issued a cease-and-desist letter to prediction markets operator Kalshi, joining the six states that took the same action last month.
Douglas Jensen, chief law enforcement officer for the Arizona Department of Gaming (ADG) wrote in the letter,
Arizona Latest State To Issue Kalshi Cease-And-Desist Letter markets. The letter explains that, “Event wagering” is defined in Arizona to mean “accepting wagers on sports events or other events…by any system or method of wagering, including in-person or over the internet through websites and on mobile devices.”“Kalshi is not licensed and its operation of event wagering in Arizona is illegal.”
No difference between buying an event contract and sports betting
The letter went on to state that Jensen believes the option to buy a contract on the outcome of a sporting event is no different from sports betting. Kalshi has claimed the CFTC holds exclusive jurisdiction over the validity of its markets, but the ADG also refutes this claim.
Arizona Latest State To Issue Kalshi Cease-And-Desist Letter Arizona Latest State To Issue Kalshi Cease-And-Desist LetterArizona sports betting was legalized in 2021, but operators are required to apply to the ADG and pay $750,000 for a license. Thereafter, 10% of gross gaming revenue must be paid in taxes to the state. There are 20 available licenses, 10 to tribal sportsbooks and 10 to private companies, which leaves little room for Kalshi or others to enter the market.
Kalshi response
Arizona Latest State To Issue Kalshi Cease-And-Desist LetterThis is in line with Kalshi CEO Tarek Mansour’s previous comment that, “The CFTC is our regulator. If the CFTC tells us to stop, we will absolutely stop. If they don’t, then we won’t.”
The CFTC has so far been silent on the issue of sports prediction markets, but it plans to hold a call next week with tribal leaders to discuss the matter.
Arizona Latest State To Issue Kalshi Cease-And-Desist LetterPrveious leaders had challenged the company over its election markets, but that challenge was withdrawn recently, paving the way for further expansion.
To date, courts have also sided with Kalshi. The company responded to cease-and-desist notices in Nevada, New Jersy and Maryland with counter-suits and received preliminary injunctions in Nevada and New Jersey to continue operations.
Arizona Latest State To Issue Kalshi Cease-And-Desist Letter
Adam is an experienced writer with years of experience in the gambling industry. He has worked as a content writer and editor for five years on sites such as Oddschecker, CoinTelegraph and Gambling Industry News, bringing excellent knowledge of the world of sports betting and online gambling. Adam focuses on emerging stories in the ever changing landscape of betting in the US. Read the latest on prediction markets, changing legislation, and sweepstakes.
