Arkansas Sues Kalshi in County Court, Seeking Injunction, Restitution and Taxes

Arkansas filed suit against KalshiEX LLC and Kalshi Inc. in Independence County Circuit Court on 4 November 2026, alleging the prediction market operator offered unlicensed wagering to 18-year-olds and seeking injunction, restitution, civil penalties and unpaid taxes. Attorney General Tim Griffin brought three counts under the Arkansas Deceptive Trade Practices Act (ADTPA) and one count of unjust enrichment, and the complaint demands civil penalties of up to $10,000 per violation and unpaid taxes for each year Kalshi served Arkansas customers.

Claims and relief sought

The complaint, captioned State of Arkansas ex rel. Tim Griffin v. KalshiEX LLC, No. 32CV-26-717, was filed in Independence County and stamped by the circuit clerk on 4 November. It names KalshiEX LLC and its sole owner Kalshi Inc., which the state describes as a Delaware corporation based in New York. Every substantive count relies on the ADTPA rather than Arkansas's gambling statutes.

The complaint pleads:

• Count 1: knowingly false representations that Kalshi’s wagers are lawful in Arkansas and that its markets are safe and protected against insider trading;

• Count 2: unconscionable conduct in offering unlicensed wagering, including to 18- to 20-year-olds;

• Count 3: deception and concealment, including alleged concealment of the risks of trading against professional participants;

• Unjust enrichment: targeting the transaction fees Kalshi collected.

The state asks the court for an injunction, restitution, damages, the maximum civil penalties allowed under ADTPA and “unpaid taxes for all applicable years owed to the State of Arkansas.” The ADTPA allows civil penalties up to $10,000 per violation, the complaint states; it does not specify a total dollar demand for penalties or taxes.

State's factual assertions and cited evidence

The complaint argues Kalshi’s consumer protections and responsible-gambling tools demonstrate the company understood its products were wagering. It cites Kalshi’s self-exclusion tools, deposit limits, trading breaks, a partnership with the National Council on Problem Gambling and recent age restrictions for users aged 18 to 20 as evidence that Kalshi recognised the activity as gambling.

The filing quotes a Roosevelt Institute paper dated 7 July and says Kalshi has admitted that nearly three times as many users lose money as make it. The complaint includes the assertion, “When it comes to the majority of its offerings, Kalshi is not a risk management tool: it is a pocket-sized bookie,” and argues that “Arkansas law is concerned with substance, not semantics.”

Attorney General Griffin is quoted in secondary reporting, as carried by CoinDesk and The Block:

"It doesn't take a genius to understand that wagering money on whether the Razorbacks win or lose is gambling," Griffin said in a statement.

Kalshi, which describes itself as a designated contract market regulated by the Commodity Futures Trading Commission, had not responded to CoinDesk or The Block at the time those outlets reported the suit on 5 November.

How Arkansas law factors into the complaint

Voters authorised casino gaming, including sports wagering, in Arkansas through Amendment 100 in 2018. The complaint explains that as amended in 2024 the state provides for three casino licences in Crittenden, Garland and Jefferson counties. Those licensees may contract with up to two branded online sports platforms each, subject to approval by the Arkansas Racing Commission, the filing says. Accounts on licensed platforms require age verification and exclude under-21s.

The complaint treats Kalshi as an unlicensed operator and asks the court to order unpaid taxes on the theory that Kalshi acted as an unlicensed casino operator subject to the state's tax scheme: net casino gaming receipts taxed at 13% up to $150 million and 20% above. The complaint alleges Kalshi took wagers outside the three licensed casinos, depriving the general fund, local governments and racing purses of revenue.

Parallel actions and forum strategy

Griffin filed the ADTPA complaint in Independence County the same day he filed a separate suit naming VGW in White County, according to Deltaplex News. The VGW filing — partly redacted in reporting — names seven VGW-linked companies and alleges illegal gambling, ADTPA violations and unjust enrichment; that complaint reportedly claims about $66 million in Arkansas taxable sales from July 2025 to June 2026.

Kalshi has pursued a different litigation posture elsewhere. In late October Kalshi sued Louisiana and Missouri in federal court before those states filed against it, and a week before the Arkansas complaint Utah brought criminal charges against Kalshi and its founders. Filing first in county court gives Arkansas claims rooted in state consumer law and makes federal pre-emption principally a defence the company can raise, rather than an immediate path into federal court. The complaint notes Kalshi may still seek removal; the article states New York's remand motion remained undecided at the start of November.

Legal and practical tensions the complaint emphasises

The complaint frames Kalshi’s consumer protections as evidence of its awareness that its offering is gambling: providing self-exclusion, deposit limits and partnerships with problem-gambling organisations are cited as admissions rather than mitigations. The filing also argues statements by Kalshi that its products are lawful would be false if federal law does not pre-empt state gambling law.

The state’s tax demand is the sharpest claim because it converts Kalshi’s transactions into taxable receipts under Arkansas’s casino tax structure and seeks unpaid taxes for unspecified years in addition to penalties and restitution. Whether the case remains in Independence County or is removed will affect the trajectory of pre-emption arguments and the practical scope of the state's remedies.