In a new lawsuit, Kalshi has said that its prediction market is regulated by the Commodity Futures Trading Commission. And that, according to the company’s team of lawyers, makes what it offers to Arizona residents beyond the reach of the Arizona Department of Gaming.

Kalshi is seeking quick action in the form of a preliminary injunction.

That’s because the Arizona Department of Gaming already has sent a letter to Tarek Mansour, the company’s chief executive officer, arguing that Kalshi’s practices run afoul of laws that regulate gambling on professional and college sports. Douglas Jensen, the agency’s chief law enforcement officer, said state law says only companies with a state license can do that.

But Jensen said this isn’t just about whether Arizonans can wager on their favorite teams. He said that the state criminal code makes it illegal to accept wagers, not just on games of skill or chance but on “any other unknown or contingent future event or occurrence whatsoever.”

Jensen told Mansour that failure to stop what Kalshi is doing could make the company liable for providing restitution to those who have lost money. And he even suggested that it could lead to criminal charges.

Kalshi, seeking to get a step ahead of that, now wants U.S. District Court Judge Michael Liburdi to rule that its activities are regulated by federal law which it says preempts any state regulation. More to the point, it wants the judge to bar the state from trying to enforce its laws against it.

There was no immediate comment from the Attorney General’s Office which represents the Department of Gaming and would be the one to take Kalshi to court.