On March 17, Arizona Attorney General Kris Mayes filed a 20-count criminal indictment against the parent company of Kalshi, a startup prediction platform, charging it with operating an illegal gambling business without a license. Arizona’s gaming department had sent Kalshi a cease-and-desist letter in May 2025. Kalshi and its rival, Polymarket, have argued that prediction markets are under federal jurisdiction, but several federal courts have allowed states to ban their activities.
Earlier this year, prediction markets drew increased scrutiny over illegal bets dealing with the death of Iran’s Supreme Leader, the Ayatollah Ali Khamenei. In February, Israel arrested army reservists for using classified Israeli military intelligence to place bets on earlier strikes on Iran. In January, an anonymous trader made a suspicious $400,000 profit on several bets on the ousting of Venezuelan President Nicolás Maduro. The last bet was placed just 48 minutes before U.S. President Donald Trump gave orders for military action.
