Kalshi, Robinhood, and Crypto.com have been issued cease-and-desist letters in Arizona.

In recent months, the rapidly expanding event trading platform Kalshi has encountered resistance and legal challenges in several states. Arizona is the latest state to issue a cease-and-desist order against this popular platform.

Kalshi recently received a cease-and-desist letter from the Arizona Department of Gaming (ADG). Alongside Kalshi, similar letters were sent to Crypto.com and Robinhood. According to InGame's announcement, the ADG addressed a letter to the platform highlighting that its offerings related to future events including sports are in violation of the current regulatory framework. The letter details that Kalshi provides contracts on future sports events, where the outcome depends on whether an individual correctly predicted the result and purchased a contract accordingly. The ADG further explained: This constitutes wagering, defined by A.R.S. § 5-1301(23)(a) as 'a sum of money or thing of value risked on an uncertain occurrence.' Additionally, the Department of Gaming emphasized that event wagering in Arizona is only legal when conducted by a licensed operator. The letter stated, Kalshi is not licensed, and its event wagering operations in Arizona are illegal. The ADG noted that the platform is evading regulatory requirements and age restrictions, which limit wagering to individuals over 21. Consequently, the ADG demanded that Kalshi cease gambling operations in Arizona and desist from such activities in the future. The letter warned that failure to comply would result in Kalshi knowingly and willfully violating state laws. The letter was signed by Douglas Jensen, the ADG's Chief Law Enforcement Officer.

Kalshi is now encountering difficulties in Arizona, making it the seventh state where the regulatory body has taken action against the platform. Late last month, Kalshi achieved a temporary legal victory in its dispute with New Jersey's Division of Gaming Enforcement. A federal court granted a temporary injunction, supporting Kalshi's stance that gambling regulators lack the authority to oversee its operations, which are regulated by the Commodity Futures Trading Commission at the federal level. As expected, Kalshi is considering filing similar federal lawsuits in other states where it has received cease-and-desist orders. In addition, the Arizona Department of Gaming has reportedly sent warnings to other platforms offering sports event contracts, including Crypto.com and Robinhood, indicating they have received communications similar to those sent to Kalshi. (