Arizona Court Temporarily Blocks State Enforcement Against Kalshi, Bars Gambling Law Claims

Source

Uk Jin

Summary

An Arizona court has temporarily blocked state enforcement against prediction market Kalshi.
The court said the CFTC is likely to prevail in arguing that Kalshi’s event contracts are swap derivatives subject to federal regulation.
As a result, Arizona authorities cannot begin or continue civil or criminal action related to event contracts regulated by the CFTC.

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An Arizona court has temporarily blocked state enforcement against prediction market Kalshi.

Cointelegraph reported on April 11 that US District Judge Michael Liburdi in Arizona granted a request from the Commodity Futures Trading Commission and the federal government to temporarily bar state authorities from applying gambling laws to Kalshi’s event contracts.

Arizona officials had treated Kalshi’s prediction market service as gambling and sought to sanction it. The CFTC argues the contracts are derivatives that qualify as swaps and therefore fall under federal regulation. The court found the agency is likely to succeed on that argument and barred the state from pursuing related enforcement while the case remains under review.

As a result, Arizona authorities cannot begin or continue civil or criminal action related to event contracts offered by Kalshi in a CFTC-regulated market. The order will remain in effect through April 24, after which the court will decide whether to extend the ban.