Arkansas Attorney General Files Suit Against Kalshi and VGW for Alleged Illegal Gambling

Arkansas Attorney General Tim Griffin has sued prediction market operator Kalshi and sweepstakes casino provider VGW for allegedly conducting illegal gambling businesses in the state. The complaints filed November 4 under the Arkansas Deceptive Trade Practices Act seek restitution, civil penalties, unpaid taxes and injunctions. The action follows an October 2025 attorney general opinion responding to questions from state Sen. Bryan King. Griffin’s office concluded that a business model resembling Kalshi’s constituted gambling under Arkansas law and required a license. However, the state did not bring its lawsuit until more than a year later.

Arkansas Calls Kalshi a 'Pocket-Sized Bookie'

The Kalshi suit describes the platform as a "straightforward gambling platform" that uses derivatives terminology to mask sports, election and entertainment event contracts. The complaint states: "When it comes to the majority of its offerings, Kalshi is not a risk management tool; it is a pocket-sized bookie." It cites Kalshi's self-exclusion, deposit limits and links to the National Council on Problem Gambling as further evidence. The filing also alleges Kalshi permits 18-to-20-year-olds to bet, below the state's 21-year minimum for casino gambling. A separate complaint targets VGW's Gold Coin and Sweeps Coin model, arguing it converts purchases into de facto gambling opportunities. While Defendants may think this distinction is clever, it is not legal, Griffin wrote.

Ninth Circuit Rejects Kalshi Rehearing Request

In a related development, the Ninth Circuit denied Kalshi's petition for panel rehearing and rehearing en banc in its Nevada dispute. In a November 4 order, the three-judge panel unanimously rejected both requests, leaving in place an August ruling against the prediction market operator in its Nevada dispute. The operator now has 90 days to petition the U.S. Supreme Court. According to reporting by Gambling Insider, the decision may also aid Arizona's parallel enforcement efforts.

State Enforcement Trends

These Arkansas actions add to existing lawsuits against VGW in Kentucky and Florida. Operators in this sector must now assess litigation exposure and licensing pathways as courts diverge on core classifications. Supreme Court review could eventually provide uniformity, but fragmented state enforcement will shape near-term compliance costs and market access.