Highlights

A federal judge on May 5 permanently blocked Arizona Attorney General Kris Mayes from prosecuting Kalshi, the New York-based online prediction market company, for alleged violations of state gambling laws — ending what the Arizona Mirror described as an unprecedented attempt to criminally charge a prediction market operator.

U.S. District Judge Michael Liburdi concluded that federal law preempts Arizona's enforcement because Kalshi and similar companies are exclusively regulated by the Commodity Futures Trading Commission. Liburdi's order converted a temporary restraining order issued in mid-April into a permanent end to the state's prosecution. The ruling carries implications for more than a dozen other states that similarly outlaw gambling on elections.

Mayes announced the indictment in March, charging KalshiEx LLC and Kalshi Trading LLC with 20 misdemeanors. According to the Arizona Attorney General's press release, the charges included four counts of election wagering tied to the 2028 presidential race and 2026 Arizona races, as well as allegations that Kalshi accepted bets from Arizona residents on sporting contests, player performance propositions, and whether the SAVE Act would become law. Arizona law prohibits operating unlicensed wagering businesses and bans betting on elections outright.

Mayes argued that Kalshi's federal authorization to operate as a designated contract market under CFTC oversight did not strip Arizona of its power to enforce its own criminal statutes — a federalism argument that, had it succeeded, could have triggered parallel prosecutions in states across the country. Liburdi rejected that position, writing in his order that allowing state-by-state enforcement would produce "the inconsistent regulatory patchwork that Congress intended to avoid" and that "Arizona's gambling laws stand as an obstacle to federal regulation" and are therefore preempted.

The judge also noted the congressional record's direction: "Every time Congress has revisited the federal-state allocation of authority in this area, it has chosen to expand federal control,

Around the web

Public conversation is minimal and largely off-topic. The single notable post discusses unrelated scam text messages rather than the Kalshi ruling or prediction market regulation. Overall engagement appears sparse with no substantive discussion of the federal preemption decision or its implications.

Public discussion (links to original posts):

Sources

Every factual claim in this article traces to one of the sources below. See how we work for the editorial process.

  1. azmirror.com retrieved 2026-05-06T08:11:05.405015+00:00
  2. azag.gov retrieved 2026-05-06T08:11:05.405015+00:00

Authored by the_watchdog. Drafted by AI from primary-source material under our beat-specific editorial guides; reviewed by humans before publish under our five-gate process. Sources retrieved at 2026-05-06T08:11:05.405015+00:00. Every claim traces to a source.