Arkansas adds to regulatory push against prediction markets with new AG opinion

Arkansas has joined a growing list of states taking formal positions against prediction markets, with Attorney General Tim Griffin concluding that platforms such as Kalshi would violate gambling laws if they operate without a license.

The opinion follows enforcement actions in states such as Ohio, New Jersey, Arizona, and Massachusetts, amid increasing state attention on unlicensed event-contract platforms.

In an official letter dated October 23, Griffin responded to inquiries from State Sen. Bryan King, who asked whether Kalshi, a platform that allows users to bet on outcomes such as elections, sports results, or other future events, would be considered illegal under Arkansas law.

The attorney general’s opinion, released as Opinion No. 2025-073, determined that such activity constitutes gambling and therefore requires licensure to operate legally in the state.

“The acts you describe meet the Supreme Court’s definition of gambling and gaming: a participant is risking money on a chance that some future event occurs,” Griffin wrote. “The fact that a company has rebranded this gambling activity as a ‘prediction market’ does not protect it from scrutiny.”

Griffin cited existing Arkansas laws that prohibit anyone from “receiving or transmitting information” concerning sports or games “for the purpose of gaming.” Based on that provision, he concluded that a company such as Kalshi “would violate the law as well” if it facilitates or transmits data related to wagers without proper authorization.

The attorney general said that, under state statutes, gambling and gaming are interpreted broadly to prevent operators from avoiding regulation through rebranding or the use of new terminology. Griffin wrote that courts read gambling laws “liberally” and “in favor of the prohibition,” consistent with the state’s established legal approach to gaming regulation.

In a separate portion of the opinion, Griffin addressed whether prediction markets would be subject to Arkansas’s tax on fantasy sports. He concluded they would not qualify as “paid fantasy sports games” under state law because winning outcomes are not based “predominantly on accumulated statistical results of the performance of individual athletes.”

As a result, prediction markets would neither be subject to the state’s fantasy sports tax nor benefit from the statutory exemptions applied to that category.

Sports betting, both retail and online, is legal in Arkansas, but operators must allocate 51% of their revenue to local casino partners. That condition has limited participation by national sportsbook companies. Only three operators currently offer sports betting in the state, all using local casino brand names.

The Arkansas opinion arrives as other states have pursued different enforcement paths. Massachusetts Attorney General Andrea Campbell has filed a lawsuit against Kalshi, while Ohio, New Jersey, and Arizona have issued cease-and-desist letters to event-contract operators.