Arkansas Politician Writes to Attorney General, Querying Whether Kalshi Breaks State Laws
Arkansas's three licensed casinos offer legal sports betting at sportsbooks inside the resorts and on their own branded apps. However, prediction markets, such as Kalshi, are not explicitly licensed or regulated as gaming operations in the state, creating a legal grey area.
State Senator Bryan King, R-Green Forest, has requested an opinion from Arkansas Attorney General Tim Griffin on the legality of operating a prediction market without a gaming license. This inquiry arises due to the lack of regulation and taxation of prediction markets under Arkansas law, despite their real-money wagers on event outcomes.
As of August 2025, no definitive AG ruling or legislation explicitly addresses this issue. Arkansas law licenses and regulates sportsbooks via the Arkansas Racing Commission, with taxation and age restrictions, but does not currently provide a licensing framework specific to prediction markets.
The operation of a prediction market like Kalshi without a gaming license is currently a legal grey area in Arkansas. The Attorney Generalβs opinion requested in August 2025 may clarify the legal status of prediction markets operating without a license, but as of now, there is no explicit law prohibiting or authorizing them without a gaming license.
Before launching or operating such a platform in Arkansas without a gaming license, one should await the outcome of the legislative or AG clarifications to ensure compliance with state gaming laws. No search results indicate any specific Arkansas statute that outright criminalizes the operation of prediction markets without a gaming license, but the inquiry shows there is regulatory uncertainty and potential legal risk until clarified.
Senator King is also questioning if sports-related event contracts would be subject to Arkansas's tax on fantasy sports games and if there are any types of event contracts that could not be exchanged under Arkansas law, such as election contracts or contracts related to future tragedies.
Kalshi, one of the largest exchange platforms for predictive markets, contends that it simply brokers financial exchanges, not bets. It makes its money from transaction fees, similar to stockbrokers, and has no interest in the results of any of its event contracts. The company has been sued in multiple states on the grounds that it operates in violation of state gaming laws, but has succeeded in defending its operation.
Larry Henry, a veteran print and broadcast reporter and editor, has worked with media outlets in states with gaming, including Tennessee and Louisiana, and may provide valuable insights into this regulatory uncertainty.
[1] Arkansas Democrat-Gazette, "Senator seeks AG opinion on legality of prediction markets," August 1, 2025. [2] Arkansas Racing Commission, "Regulations for Sports Wagering," accessed August 1, 2025. [3] Commodity Futures Trading Commission, "Kalshi Certified as Designated Contract Market," press release, October 1, 2020.
- The operation of a platform like Kalshi, which deals with predictive markets, is currently in a legal grey area in Arkansas, as it does not hold a gaming license and is not explicitly regulated or taxed under Arkansas law.
- Before starting or operating a prediction market platform in Arkansas without a gaming license, it is advisable to wait for the outcome of legislative or AG clarifications to ensure compliance with state gaming laws.
- While Kalshi, one of the largest platform for predictive markets, argues that it merely brokers financial exchanges, not bets, and makes its money from transaction fees, similar to stockbrokers, it has faced lawsuits in various states over allegations of operating in violation of state gaming laws.
