Arkansas AG Sues Kalshi and VGW in Broad Gambling Crackdown

Arkansas Attorney General Tim Griffin filed separate lawsuits on 5 November 2026 against prediction markets operator Kalshi and sweepstakes operator VGW, alleging both companies offer illegal gambling in Arkansas and seeking monetary penalties, restitution to customers and unpaid taxes. Griffin’s filings describe Kalshi as a “pocket-sized bookie” and argue VGW’s dual-currency sweepstakes model misrepresents its product to Arkansans.

The Kalshi complaint

Griffin’s suit characterises Kalshi’s platform as a derivatives framework stretched beyond risk management. The complaint states: > "This case is not about a market where participants manage legitimate business and financial risks. such as uncertainty related to weather. commodities, and other economic conditions. Rather. it concerns Kalshi's effort to stretch the derivative-market framework beyond recognition," and adds that "When it comes to the majority of its offerings, Kalshi is not a risk management tool; it is a pocket-sized bookie." The attorney general notes Kalshi offers outcomes on football games, elections and awards shows.

The suit also cites Kalshi’s consumer-protection features against the company’s own claims that its products are not gambling. Griffin points to Kalshi’s self-exclusion tools, deposit limits, trading breaks and its partnership with the National Council on Problem Gambling as evidence the platform recognises gambling risks. The complaint quotes: "Kalshi would not partner with problem-gambling organizations, direct users to gambling-addiction resources, and impose special protections on young adults if its products carried none of the risks associated with gambling." Kalshi did not reply to a request for comment before publication.

The VGW complaint

The VGW filing alleges the company falsely claims it is not operating a gambling business while offering Arkansans the chance to play popular online games. The suit says: "VGW provides Arkansans the opportunity to play various popular online games, and it claims that it is not operating a gambling business. But our review of the company shows that claim to be false." Griffin attacks the sweepstakes model's dual-currency structure, arguing the distinction between purchased virtual currency and redeemable virtual currency is "weak at best," and notes courts have rejected similar reasoning.

As with Kalshi, the VGW action seeks restitution for customers, civil penalties including taxes owed to the state, and injunctive relief to stop VGW from operating in Arkansas in the future.

Arkansas sports betting and market context

Arkansas first moved on sports betting via a 2018 ballot measure that approved in-person wagering at four casino locations. The state launched retail sports betting in 2019, and from launch through early 2022 Arkansas crossed $1,000,000 in monthly revenue in only four individual months. The market expanded to online wagering in March 2022 with BetSaracen and later added the DraftKings and FanDuel apps in March 2026. Through May 2026 the Arkansas market generated more than $185m in revenue on $2.3bn in handle.

Griffin frames his actions against Kalshi and VGW under state consumer-protection law, alleging deceptive trade practices and unlawful gambling. Both suits request financial relief to compensate customers and restore unpaid taxes to Arkansas.