U.S. federal judge Michael Liburdi ruled on April 10 that Arizona will be temporarily barred from bringing criminal charges against prediction market platform Kalshi. The ruling responded to a motion from the U.S. Commodity Futures Trading Commission (CFTC), pausing the arraignment hearing scheduled for next Monday.
Arizona filed 20 criminal counts
Arizona prosecutors previously filed 20 misdemeanor charges against Kalshi, alleging it illegally accepted bets on political outcomes, college sports events, and individual player performance. Arizona was the first state to bring criminal charges against Kalshi. Under the state’s laws, operating unlicensed gambling businesses and election betting is prohibited.
CFTC argues that federal oversight takes priority
The CFTC sued Arizona and two other states, arguing that prediction markets (also known as event contracts) are swap transactions that fall under the jurisdiction of federal regulators, and that federal regulatory authority takes precedence over state law. Kalshi, meanwhile, has insisted that it is a financial market rather than a gambling platform and should be regulated only by the CFTC.
This argument gained additional support this week—the U.S. Court of Appeals for the Third Circuit ruled that prediction markets are indeed subject to CFTC rules, and that it is up to the CFTC to decide whether operators may offer sports-related products.
Impact on the prediction market industry
The ruling is also significant for crypto prediction market platforms such as Polymarket. If a federal court ultimately confirms the federal regulatory status of prediction markets, it would effectively prevent states from suing prediction market operators under gambling regulations, providing a clearer legal environment for the entire industry.
That said, the case has not been finally decided yet. The judge has only temporarily blocked Arizona’s case proceedings for now, and the ultimate outcome remains to be determined in further proceedings.
This article, “U.S. federal judge temporarily blocks Arizona’s criminal case against Kalshi, strengthening the federal regulatory status of prediction markets,” first appeared on LianNews ABMedia.
Disclaimer: The information on this page may come from third parties and does not represent the views or opinions of Gate. The content displayed on this page is for reference only and does not constitute any financial, investment, or legal advice. Gate does not guarantee the accuracy or completeness of the information and shall not be liable for any losses arising from the use of this information. Virtual asset investments carry high risks and are subject to significant price volatility. You may lose all of your invested principal. Please fully understand the relevant risks and make prudent decisions based on your own financial situation and risk tolerance. For details, please refer to
Disclaimer.
Related Articles
Kalshi Penalizes Three US Congressional Candidates for Wagering on Own Campaigns
Gate News message, April 23 — Prediction markets platform Kalshi has fined and suspended three congressional candidates for wagering on the outcomes of their own campaigns, stepping up enforcement of insider trading controls.
Mark Moran, running for a Senate seat in Virginia, received a $6,229
GateNews20m ago
Polymarket Faces Insider Trading Scrutiny as Trump-Related Prediction Trading Surges
Gate News message, April 23 — Polymarket, a crypto prediction market platform, has drawn insider trading allegations following a surge in trading volume around predictions related to U.S. President Donald Trump's policies and statements. Between April 5 and 8, markets predicting outcomes related to
GateNews3h ago
Delphi AI Prediction Market Launches on Gensyn Mainnet
Gate News message, April 23 — AI prediction market protocol Delphi has officially launched on Gensyn, an AI computing protocol, enabling humans and AI agents to conduct prediction trades on the same platform. Settlement is completed on-chain through verified AI oracles.
Gensyn previously launched D
GateNews3h ago
Microsoft Considered Acquiring Cursor, But SpaceX Secured Deal Option at $60B Valuation
Gate News message, April 23 — Microsoft evaluated the possibility of acquiring AI coding tool company Cursor but ultimately did not proceed with the transaction. SpaceX subsequently secured an agreement to acquire Cursor at a $60 billion valuation, with a $10 billion breakup fee if the acquisition i
GateNews3h ago
Météo France Files Police Complaint Over $35K Polymarket Weather Bet Anomalies
Polymarket traders won more than $35,000 after temperature sensor spikes near Paris-Charles de Gaulle airport resolved long-shot weather bets in their favor, prompting France's national weather agency to file a police complaint. The incidents occurred on April 6 and April 15, when a Météo France sen
CryptoFrontier4h ago
Polymarket Trading Volume Surges to $100M+ During U.S.-Iran Tensions, April 5-8
Gate News message, April 23 — Polymarket, a prediction market platform, saw trading volume surge to over $100 million during the U.S.-Iran tensions from April 5 to April 8. According to Dune data, 413 million trades related to Iran conflict occurred during this four-day period, driven by uncertainty
GateNews4h ago
