Arkansas Attorney General sues Kalshi, gaming platform VGW for illegal gambling

LITTLE ROCK, Ark. (KATV) — Arkansas Attorney General Tim Griffin has filed two lawsuits against the owners of prediction market Kalshi and online gaming platform VGW, alleging both companies are operating illegal gambling businesses in the state.

According to the lawsuits, Griffin alleges Kalshi's owners, KalshiEX LLC and Kalshi Inc., and VGW violated the Arkansas Deceptive Trade Practices Act.

Kalshi, an online prediction market, allows users to wager money on the outcome of events ranging from elections to sporting competitions.

It doesn’t take a genius to understand that wagering money on whether the Razorbacks win or lose is gambling. And gambling on an unregulated platform is squarely prohibited by Arkansas law, Griffin said in a release.

Griffin said Arkansas regulates gambling to protect consumers.

Instead of obtaining the licenses, submitting to the oversight, complying with the restrictions, and paying the taxes required of lawful gambling operators in Arkansas, Kalshi opened its platforms to Arkansas consumers, including individuals as young as 18 years old, encouraged them to wager real money on sporting and entertainment events, and profited from those wagers.

Kalshi offers self-exclusion tools, deposit limits, trading breaks, and other tools commonly associated with gambling operators to help users stay in control of wagering activity. It promotes gambling addiction resources, including its own partnership with the National Council for Problem Gambling. Kalshi is not blind that its platform presents real, tangible risks to its users, including excessive wagering, financial losses, depression, and other mental health harms.

VGW rests its claim that it does not provide gambling services on a distinction between two virtual currencies," Griffin said. "One is called ‘Gold Coins,’ and it is effectively worthless. But consumers purchase Gold Coins with real money. When they do, they receive ‘Sweeps Coins’ as a bonus. Sweeps Coins can be used to play online casino-style games, and users can redeem Sweeps Coins they win through those games for actual cash. Any reasonable person would call that gambling.

VGW’s claim that the distinction between the virtual currency one buys and the virtual currency one redeems is weak at best, and courts have rejected this too-cute-by-half logic time and time again. Companies that operate gambling businesses in Arkansas are subject to our gambling laws, plain and simple.

Both complains are seeking relief in the form of restitution, penalties, taxes and injunctive relief.

Copies of both lawsuits are available below.

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