CFTC Joins Forces with the Department of Justice to Block Arizona’s Attempt to Prosecute Prediction Market Platform Kalshi Under Gambling Laws

According to CoinDesk, the U.S. Commodity Futures Trading Commission (CFTC) and the Department of Justice jointly filed an application with a federal court on Tuesday evening seeking to block Arizona from enforcing its state gambling laws against prediction market operator Kalshi. The two agencies argue that Kalshi’s contracts—tied to real-world events such as sporting events and elections—are, in substance, financial derivatives (swaps) subject to the Commodity Exchange Act and the federal regulatory framework, rather than state-level gambling regulations. Arizona had previously brought criminal charges against Kalshi, with a trial scheduled for April 13. Courts across the country have issued conflicting rulings: the U.S. Court of Appeals for the Third Circuit (New Jersey) has leaned toward supporting the federal regulatory position, while other district courts have remained open to the state’s arguments.