Kalshi granted Arizona reprieve following CFTC intervention

After having its preliminary injunction request against state regulators formally denied last week, Arizona lawmakers have seemingly backtracked after intervention from the Commodity Futures Trading Commission (CFTC).  

Indeed, a federal judge for the state of Arizona has today approved a restraining order request from the CFTC which has spelled the temporary suspension of Kalshi’s case – granting temporary protection from prosecution for the prediction market operator.  

This development comes after a criminal indictment against Kalshi was filed last month by Arizona state regulators for allegedly offering unregulated gambling products within state borders via its prediction market contracts. Kalshi refutes these allegations, underlining that its products are regulated at federal level under the sole jurisdiction of the CFTC.  

Following this latest action, CFTC Chairman Michael Selig has openly criticized state authorities, arguing that they have overstepped their jurisdiction in an attempt to “circumvent federal law” by engaging in “intimidation” against Kalshi. It remains unclear how long this temporary restraining order will remain in effect before the case reopens.  

March saw Global Gaming Insider conduct an exclusive interview with Arizona Department of Gaming Director Jackie Johnson – who underlined that the regulator’s view is that “prediction markets are a form of gambling that needs to be regulated in the state of Arizona.”  

Nevertheless, Johnson stated that she believes a collaborative approach remains the most effective path in resolving the broader contention around prediction market regulation in the US: “We don't want to put the hammer down on our stakeholders. We invite dialogue with them.” 

Elsewhere today, Robinhood also outlined that it is approaching certain prediction market event contract types with caution following recent controversy around some of Polymarket’s available war-related outcomes.