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Rules and licensingArizona fights to regulate prediction markets as sports betting battle continues
Arizona is asking the court of appeals to let the state take legal action against Kalshi.
Written by the BettingEdgeHub desk, 29 September 2026
Arizona attorney general Kris Mayes is pushing the ninth circuit court of appeals to reverse a previous decision. That earlier ruling stopped the state from taking legal action against prediction platform Kalshi.
The legal battle
Mayes argues that a similar case in Nevada proves individual states have the right to regulate sports prediction contracts. Kalshi maintains that its event contracts are financial derivatives regulated only by federal authorities.
Federal versus state oversight
A district judge previously blocked Arizona from prosecuting the platform under state gambling laws. The court decided that the commodity futures trading commission holds the correct authority over these products.
The Nevada precedent
Mayes points to a contradictory ruling in Nevada where the court allowed state gaming regulators to restrict Kalshi. She wants the court to apply the same logic to the Arizona injunction.
What happens next
Conflicting court rulings mean this fight could eventually reach the supreme court for a final decision. Lower courts must untangle these legal arguments in the meantime.
The outcome of this legal battle will decide if prediction markets can offer sports contracts without state gambling licenses.