Arizona has become the first state to file criminal charges against Kalshi, accusing the prediction market platform of operating an illegal gambling business within its borders.

This is the latest state action taken against Kalshi, which insists it's not a gambling operation but merely a conduit for federally regulated swaps, a type of contract often found in financial investing.

The charges filed by Attorney General Kris Mayes' office are based on $97 of bets placed between December and March on Kalshi's platform.

Arizona has filed 20 criminal counts against Kalshi, a prediction market platform, accusing it of operating an illegal gambling business and offering election wagering in the state.

The complaint includes 20 separate counts against Kalshi, claiming the company accepted bets from Arizona residents in violation of state law.

Arizona’s attorney general today filed criminal charges against Kalshi, accusing the prediction market platform of operating an illegal gambling business in the state and unlawfully allowing people to place bets on elections.

Arizona Attorney General Kris Mayes has sued the prediction market platform Kalshi, accusing it of operating illegal gambling operations in the state, and for allowing gambling on elections, which violates state law.

Kalshi and Polymarket are tightening their rules on insider trading as Congress appears to be moving closer to cracking down on prediction markets.