Arkansas Attorney General Tim Griffin has filed a lawsuit against Kalshi in Independence County Circuit Court, representing the latest US state to enter into legal action against the prediction market operator.
Within Griffin’s filing, the Attorney General states: “The existence of legitimate derivatives does not grant Kalshi carte blanche to turn virtually any real-world occurrence into a betting opportunity. When it comes to the majority of its offerings, Kalshi is not a risk management tool; it is a pocket-sized bookie.
“Whatever label Defendants attach to these contracts, consumers use them to do what gamblers have always done: risk money on the outcome of an athletic contest in hopes of receiving a greater return. That is sports betting. And Arkansas has long chosen to regulate such conduct because of the risks it poses to consumers and the public.”
Griffin is seeking restitution, injunctive relief, actual and compensatory damages and civil penalties as part of the lawsuit, having also alleged that Kalshi misrepresented the legality and safety of its products and engaged in unconscionable conduct.
The Arkansas regulator also believes Kalshi failed to disclose material information regarding financial risks and professional-trader advantages and was “unjustly enriched” through unlawful gambling activity.
The lawsuit would force Kalshi to restrict operations in Arkansas and recover any funds obtained from residents, while the state would impose civil penalties for its prediction market activity.
Representing an advanced effort to deter Kalshi’s services, Arizona and Utah became the first US states to file criminal charges against the operator, which include potential prison time for Co-Founders Luana Lopes Lara and Tarek Mansour.
Such penalties are unlikely even if Kalshi were to be found guilty, however, but the charges do include a 20-count misdemeanor filing in Arizona and a second-degree felony charge, 12 third-degree felony counts and one Class A misdemeanor in Utah.
Prediction market operators Kalshi and Polymarket announced new guardrails for player safety on October 28, as well as to detect potential manipulation of US Midterm Election markets
