Is Kalshi legal in Arizona?

On March 17, 2026, the attorney general filed a 20-count criminal information in Maricopa County Superior Court against KalshiEX LLC and Kalshi Trading LLC. The attorney general's release of that date says the charges were filed "today".

The information charges two kinds of offense (p.1). Sixteen counts allege betting and wagering, class 1 misdemeanors under A.R.S. § 13-3305(A)(1): that the companies were in the business of accepting bets on sporting events and other contingent events. Four counts, 10, 12, 18 and 19, allege election wagering, class 2 misdemeanors under A.R.S. § 16-1015. Each count describes a single trade. The first is a $30 trade on the December 14, 2025 Commanders-Giants game; others include a $1 Super Bowl proposition, a $1 trade on whether the SAVE Act becomes law, a $2 trade on the 2028 presidential election and a $1 trade on the 2026 Republican primary for governor.

The charges came after the Arizona Department of Gaming sent Kalshi a cease-and-desist letter telling it to "cease gambling operations in Arizona" and warning of criminal charges or a civil action, as the federal court describes it (order, p.2). The release says Kalshi sued the state on March 12, before the charges were filed. They are the state's allegations; no court has decided them.

Kalshi's suit is KalshiEX LLC v. Johnson, No. 2:26-cv-01715, before Judge Michael T. Liburdi, against Jackie Johnson, director of the Department of Gaming, and other officials. It went badly for Kalshi at first: the court denied its request for a temporary restraining order, consolidated the case with a suit the United States and the CFTC filed on April 2, 2026 (No. 2:26-cv-02246), and denied Kalshi's own injunction motion (order p.2). Arizona's Ninth Circuit filing says that denial relied on the Anti-Injunction Act, the federal statute that limits when a federal court may halt a state-court proceeding (motion, p.4 n.5).

The federal government's motion succeeded where Kalshi's did not. On May 5, 2026, Judge Liburdi held that "event contracts traded on DCMs are swaps" under the Commodity Exchange Act (order p.9) and that field and conflict preemption "independently bar Arizona's enforcement against Kalshi" (p.10). His order reads: "Defendants are enjoined and restrained from enforcing Arizona's gambling laws, including Ariz. Rev. Stat. §§ 5-1301 et seq., §§ 13-3301-13-3312, and § 16-1015, through any criminal or civil enforcement actions related to event contracts listed on CFTC-regulated designated contract markets", including subpoenas (p.17). The statutes it names include the ones the information charges. We found no order vacating or staying it.

Arizona appealed (No. 26-4281). On September 14, 2026, it moved for summary disposition: to vacate the injunction "as applied to sports contracts" and to send the election contracts back to the district court (Dkt. 25, p.1). Its basis is the Ninth Circuit's August 28 decision in Kalshi's Nevada case, KalshiEX v. Assad, which held Kalshi's sports contracts likely not swaps and Nevada's gaming laws likely not preempted; Arizona calls Assad "the law of this Circuit" (p.3). It notes the court may wait for Kalshi's September 9 rehearing petition in Assad, and that the district court required no bond, so Arizona has "no easy recourse" for what it calls ongoing violations (p.3 n.3-4).

The United States and the CFTC told Arizona they would oppose, preferring that "a stay should be maintained" at least until the Assad rehearing petition is resolved (p.2 n.1). Kalshi's own appeal from the denial of its injunction, No. 26-2978, is stayed (p.4 n.5). We found no ruling on Arizona's motion. Kalshi in Nevada follows Assad, and Kalshi at the Supreme Court follows the petitions on the same preemption question.

Yes, in its own filings. Arizona law, in the attorney general's words, "separately bans betting on elections outright", apart from its licensing rules for wagering, and four of the twenty counts charge election wagering under § 16-1015. That statute is named in the injunction. Arizona's Ninth Circuit motion asks for the injunction to be lifted only for sports contracts and for the district court to decide whether election contracts fit the federal definition of a swap or whether the ban can be enforced against them, along with a contract on a non-electoral political outcome, the SAVE Act count (Dkt. 25, p.4). Both sides of the wider gambling question are in is Kalshi gambling?

No order or filing we found in the Arizona cases addresses withdrawals, deposits or open positions on Kalshi. The information charges the two companies, not anyone who traded, and the injunction bars the state from pursuing it while the injunction stands.

Arizona's position is that Kalshi runs an unlicensed wagering business and takes bets on elections; Judge Liburdi found the contracts likely to be swaps under the federal commodities statute and Arizona's enforcement likely preempted. Both go to who regulates the exchange. Neither the charges nor the injunction address federal income tax, and the IRS has issued no ruling or guidance on event contracts.

Of the people we've seen file, three ways are the most common: gambling winnings and losses under 165(d), standard capital gains on Form 8949, and Section 1256 on Form 6781. How Realize rebuilds a Kalshi year from its fills under each is in how to file Kalshi taxes, and every other state's status is on the Kalshi legal page.