Arkansas Sues Kalshi and VGW as State Gambling Fights Widen
Published: November 5, 2026 | Author: Roxy Vance
Arkansas Attorney General Tim Griffin sued prediction market Kalshi and sweepstakes casino operator VGW on November 4, 2026, claiming both offer gambling to Arkansans in violation of state law. The suits follow civil and criminal cases against Kalshi in Utah, which the federal government is now fighting in court on the grounds that state gambling laws can’t reach exchanges it regulates.
What Arkansas Alleges
The Kalshi lawsuit names KalshiEX LLC and Kalshi Inc. and claims multiple violations of the Arkansas Deceptive Trade Practices Act. Griffin said Kalshi opened its platforms to Arkansas consumers as young as 18 without getting the licenses, oversight and tax obligations that apply to lawful gambling operators.
“It doesn’t take a genius to understand that wagering money on whether the Razorbacks win or lose is gambling,” Griffin said. He pointed to Kalshi’s self-exclusion tools, deposit limits and its partnership with the National Council for Problem Gambling as signs that it works like a gambling operator. “Although Kalshi insists that its products are not gambling, its actions speak louder than its labels,” he said.
The VGW lawsuit covers Chumba Casino, LuckyLand Casino, LuckyLand Slots and Global Poker. Griffin described the sweepstakes casino model: players buy “Gold Coins” with real money and receive “Sweeps Coins” as a bonus, which can be played on casino-style games and redeemed for cash. “Any reasonable person would call that gambling,” Griffin said, adding that courts had rejected similar arguments from internet sweepstakes cafes. VGW says it does not run a gambling business, according to Griffin’s statement.
Both suits seek restitution, penalties, taxes and injunctive relief.
Utah’s Civil and Criminal Cases
Utah has brought both civil and criminal cases. Attorney General Derek Brown filed a civil enforcement action against Kalshi and related companies in Salt Lake County on October 20, 2026. Utah then charged Kalshi and its co-founders, Tarek Mansour and Luana Lopes Lara, with one second-degree felony count of pattern of unlawful activity, 12 third-degree felony counts of online gambling promotion and one misdemeanor count, Deseret News reported on October 28. According to the charges, a state investigator opened an undercover account on September 13 and placed a dozen bets over 11 days.
“Calling it a ‘prediction market’ doesn’t change what it is, and being federally registered doesn’t put a company above the law,” Brown said in a statement. A Kalshi spokesperson told Deseret News: “This is a crazy overreach; Utah is clearly playing politics.”
The Federal Government Pushes Back
On October 26, the United States and the Commodity Futures Trading Commission (CFTC) sued Utah in federal court. The complaint argues the Commodity Exchange Act gives the CFTC “exclusive jurisdiction” over swaps traded on federally regulated exchanges, and that the event contracts Utah targets are swaps. It asks the court to declare Utah’s laws preempted for those transactions and to bar the state from enforcing them.
The complaint cites orders from several federal courts, including the Third Circuit and courts in Illinois and Minnesota, that bar states from enforcing gambling laws against CFTC-regulated exchanges. Courts have not all agreed: a federal judge ruled in August that Utah’s gambling laws apply to Kalshi’s sports contracts, Deseret News reported.
What It Means for Players
For players, the legal status of prediction markets and sweepstakes casinos now depends on the state they live in and on cases still moving through the courts. Arkansas’s suits are against the companies. Other states have acted on sweepstakes casinos too, as in Oklahoma’s ban, and regulators outside the US have also weighed in, as Australia’s ASIC did.
