Federal judge blocks Arizona from bringing criminal charges against Kalshi

Arizona has been barred from filing criminal charges against Kalshi, at least temporarily, by a federal judge after he filed an appeal with the Commodity Futures Trading Commission to bring criminal proceedings against prediction market provider Kalashi.

In the District of Arizona, District Judge Michael Liburdi ruled Friday that Arizona cannot hold an arraignment of Kalshi as scheduled on Monday, April 13. Arizona last month said it would file 20 criminal charges against Kalshi for offering what the state claimed were betting products in violation of Arizona law.

paradigm’s senior regulatory counsel Stefan Schropp said the judge ruled in the temporary restraining order that defendants are “acquired and bound by enforcement of Arizona’d-infringing” (the law) gambling laws enforced in any criminal or civil enforcement action to any contracts listed on CFTC-regulated [designated contract markets]”.

In a statement Friday, CFTC Chair Michael Selig said the regulator “appreciated” the judge’s decision.

He said ‘Arizona’s decision to weaponize state criminal law against companies that comply with federal law is a dangerous precedent, and the court’S order today sends. clear message that intimidation is not an acceptable way to circumvent federal laws.

Arizona and two other states sued the CFTC, which has filed lawsuits alleging that “prediction markets (also known as event contracts) are swaps subject to the supervision of the federal agency” and that its role preempts state law.

A view that’s largely mixed in court is one of the most common views on this; state courts have often been divided with states, such as when a Nevada state court ruling that Kalshi could be temporarily blocked by the Gaming Control Board while broader case moves forward.

Earlier this week, Federal courts have had different results; the Third Circuit Court of Appeals held that “prediction markets are subject to CFTC rule” and it was up to the CCTC’s discretion on whether they wanted providers to block them from offering sports-related products or not.

But the Ninth Circuit Court of Appeals declined to comment on the Nevada action that has been described as “a state court” blocking Kalshi, but this week will hear a hearing on consolidated case where several provider providers and other parties can argue.

The CFTC filed the motion to block Arizona state action against Kalshi two days after Judge Liburdi of Arizona denied Kal Shi’s own motion for a preliminary injunction against the state.

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