Arizona tries to crack down on prediction markets, hitting Kalshi with withdrawal letters calling their markets no different from sports betting. 

Yet another state has ordered online prediction market firms to halt operations as the Arizona Department of Gaming (ADG) issued letters to the likes of Kalshi, Robinhood and Crypto.com leave the market.

As first reported by InGame, in a letter to Kalshi dated May 21, Douglas Jensen – chief law enforcement officer for the ADG – made it clear that Arizona regulators deem Kalshi’s business as illegal within state lines.

As such, the department ordered Kalshi to “cease gambling operations … and desist from engaging in those activities in the future.

“Failure to do so is further evidence of your ongoing knowing and willful violation of the law.”

Within the letter to Kalshi, Jensen outlined how state regulators perceive how Kalshi operates, in that the firm allows users to purchase “contracts” on future events within the world of sports.

Whether those users get paid, Jensen continued, depends on whether they correctly predict the result of that event. “This,” Jensen wrote, “amounts to Kalshi taking wagers.”

As Kalshi is not licensed by the state to do so, its operation in the Grand Canyon State is illegal.