The Commodity Futures Trading Commission has obtained a temporary restraining order preventing Arizona from pursuing a criminal case against Kalshi, pausing a legal dispute over whether the company’s operations fall under federal or state authority.
Federal Intervention And Legal Position
CFTC Chairman Michael S. Selig said the state’s actions represented an attempt to apply criminal law to a company operating within federal regulations. In a statement, he said the court’s decision signals that such enforcement efforts are not appropriate when federal compliance is involved.
The CFTC typically operates with five commissioners, but Selig is currently the sole member following his confirmation in December and the departure of former acting chair Caroline Pham, who left to join MoonPay.
Arizona’s Case And Allegations
The legal action was brought by Kris Mayes, who accused Kalshi of running an unlicensed gambling business within the state. The charges argue that the company’s prediction market activities violate state law.
The restraining order comes shortly after a federal judge allowed Arizona’s case to proceed, according to Bloomberg, indicating ongoing legal uncertainty over jurisdiction.
Broader Legal Actions
The CFTC has also filed similar lawsuits seeking to block related state-level cases in Connecticut and Illinois, signaling a wider effort to assert federal oversight in disputes involving prediction markets.
Featured image credits: Wikimedia Commons
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