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 Traders Forecast XRP to Hit $1.60 in April
Kalshi traders predict XRP will reach $1.60 in April amid rising demand and significant ETF inflows. With a bullish technical outlook and upcoming regulatory votes, XRP's market dynamics show potential for further gains, despite risks of declining support levels if outcomes are unfavorable.
CryptoFrontier14h ago
Premier League Tottenham vs Brighton is a crucial matchup, with Polymarket forecasting a 50% chance that Tottenham will be relegated
Tottenham Hotspur this season has surged from Europa League champions all the way to the relegation zone, facing a relegation battle. In the 14 matches without a win, the team has been hit by a series of injuries and a change in head coach, and an ESPN report says that poor passing ability is a key factor. Sunday’s match against Brighton will be a do-or-die game for survival; if they lose, it will seriously affect morale and the standings. Successful survival requires three major conditions, and for a former “pyramid” club, relegation will inevitably cause a major loss.
ChainNewsAbmedia18h ago
Hong Kong SFC Investment Committee Warns Prediction Market Trading May Constitute Illegal Gambling
The Hong Kong SFC warns that prediction markets are speculative and not investment products, lacking regulatory protection. They involve gambling elements, potentially making them illegal. The committee urges the public to differentiate between investment and gambling.
GateNews21h ago
Prediction Markets Show Stark Wealth Concentration: 84% of Traders Lose Money
Prediction markets show stark wealth concentration, with 84.1% of Polymarket traders losing money, while just 0.04% hold over 70% of profits. Legislative efforts like the BETS OFF Act aim to regulate betting on sensitive events, as concerns rise over user protections amid the entry of major financial institutions.
GateNews04-17 19:41
DAZN Partners with ADI Predictstreet to Launch Blockchain Prediction Market for 2026 World Cup
DAZN partners with ADI Predictstreet to introduce a blockchain prediction market for the 2026 FIFA World Cup. Users can engage in real-time predictions, utilizing advanced technology for privacy and scalability, despite regulatory challenges in Europe.
GateNews04-17 14:31
Hong Kong Suspends Basketball Betting Project Amid Concerns Over Prediction Markets and Illegal Gambling
Hong Kong's government has suspended its basketball betting project due to concerns over the rapid growth of prediction markets linked to illegal gambling. With monthly trading volumes rising dramatically, authorities aim to enhance public education and collaborate on measures against gambling.
GateNews04-17 08:01
