Kalshi CEO’s midterm victory lap runs into a third state crackdown in one week

Arkansas Attorney General Tim Griffin sued KalshiEX LLC and Kalshi Inc. on Wednesday in an Independence County complaint, alleging the prediction market offers illegal gambling to state residents in violation of the Deceptive Trade Practices Act and seeking restitution, penalties, taxes and injunctive relief. Kalshi contends its event contracts are federally regulated derivatives and therefore outside state gambling law. The suit came as CEO Tarek Mansour said Kalshi’s markets correctly forecast 98% of the midterm races it listed, with more than $1.3 billion wagered through the platform. Litigation now touches about 20 states; Utah charged Kalshi and its co-founders with 13 felonies and a misdemeanor on October 28, and courts have split on the federal-versus-state question.