A federal judge has temporarily blocked Arizona from bringing criminal charges against prediction market provider Kalshi. District Judge Michael Liburdi in the District of Arizona ruled Friday that Arizona cannot hold Kalshi's arraignment, which was scheduled for Monday, April 13. Arizona had announced plans to file 20 criminal charges against Kalshi, alleging the company offered betting products in violation of state law.
The Commodity Futures Trading Commission (CFTC) had filed a motion requesting the block, arguing that prediction markets, also known as event contracts, are swaps subject to federal supervision and that federal law preempts state law. CFTC Chair Michael Selig stated that the judge's order sends a clear message against using state criminal law to circumvent federal regulation. This ruling follows mixed results in other jurisdictions, with some state courts siding with states and federal appeals courts issuing differing opinions on CFTC authority over prediction markets.