Arizona Requests Postponement of Hearing in Case Against Kalshi
In its current case against Kalshi, Arizona is looking to delay hearings to see the outcome of a similar case in Nevada.
Officials in Arizona asked a federal court to postpone the next hearing in their pending case against the prediction market platform.
Arizona seeks a postponement
Arizona lawmakers want a delay, as their case may be pinned on another case against Kalshi in the Ninth Circuit. The ruling in that Nevada case may have ramifications for the classification and regulation of event-based contracts.
Nevada currently has a ban on Kalshi offering its platform in the state, while a similar case to ban the prediction market platform in New Jersey failed.
The next Arizona hearing is scheduled for May 6, but state officials filed a joint status report on April 20, asking that it be held on June 3 or later. As it stands now, both parties in the case have agreed to extend the temporary restraining order (TRO) currently in place.
More time to gather evidence
The state officials in Arizona stated they need more time to gather facts to help the court reach a decision on the Kalshi preliminary injunction. The argument from Arizona state attorneys is that a postponement of the May 6 hearing would allow them to raise and brief additional issues, such as the classification of the event contract and the financial and economic outcomes of the prediction market.
Arizona officials also stated they may submit witness testimony and seek limited discovery to create a clearer record of evidence. That evidence may be more helpful to their case if the Ninth Circuit in Nevada rules against Kalshi.
What the regulator wants
While Arizona asks for a postponement of the hearing, the federal regulator of the prediction market, the Commodity Futures Trading Commission (CFTC), is against it. The CFTC has found that both sides in the case have given sufficient arguments and that a delay would not be necessary. In the current Arizona case, the CFTC interceded in support of Kalshi and did the same in the New Jersey case. It is no surprise that Kalshi also believes a delay is unnecessary.
While not seeking a postponement, the CFTC instead asked the court for a stay and a preliminary injunction. It also launched a lawsuit against Wisconsin in the latest prediction markets battle.
The Ninth Circuit issue
Both Arizona officials and the CFTC have confirmed that the Ninth Circuit could consolidate cases in Nevada, which would greatly influence the case in Arizona. The appellate judges in Arizona, in the April 16 hearing, had the same thoughts as the ones in Nevada in their case that banned Kalshi. They questioned how sports event contracts differ from state-regulated sports betting.
Another major issue the judges questioned is whether federal law supersedes state gambling laws. The Chair of the CFTC, Michael Selig, said in an interview with CNBC that, “What we’re seeing is an attempt by the state commissions to effectively nullify federal law."
Big money
As the prediction market industry has grown rapidly, more and more state gambling regulators have opposed the platforms. They see the sports events contracts as sports bets that should be regulated and taxed by the states.
The growth of prediction markets has led to increased competition with state-regulated sportsbooks. The more money the prediction market platforms take from the sportsbooks, the less gambling tax money the states will receive.
Kalshi began offering contracts for sports events in January 2025. Since that time, the company has processed over $16.8 billion, more than double Nevada's sports betting handle in 2025 ($8 billion). For this year’s Super Bowl alone, the prediction market platform reported contract volume exceeding $1 billion.
