Arkansas Sues Kalshi and VGW Over Illegal Gambling

Arkansas Attorney General Tim Griffin sued the prediction market Kalshi and the sweepstakes casino operator VGW on Wednesday, filing two separate complaints that accuse the companies of running illegal gambling businesses selling products Arkansas does not license. Both suits were brought under the Arkansas Deceptive Trade Practices Act, and both seek restitution for consumers, civil penalties and injunctions.

The Kalshi complaint was filed in Independence County, the VGW complaint in White County. Route Fifty reported that spokespeople for both companies did not immediately answer emailed requests for comment on Wednesday.

"Substance, not semantics"

Griffin built his case on a single argument: that describing a wager as something else does not change what it is. "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," he said in a statement.

"Arkansas law is concerned with substance, not semantics," Griffin added. He argued that Kalshi skipped the obligations that licensed gambling operators accept — obtaining licenses, submitting to oversight, complying with restrictions and paying gambling taxes — while opening its platform to Arkansas residents as young as 18 and profiting from their wagers. The complaint calls Kalshi a "pocket-sized bookie."

Kalshi insists its products are not gambling. Griffin's office turned that defense into evidence, noting in its release that Kalshi offers self-exclusion tools, deposit limits and trading breaks — features it described as "commonly associated with gambling operators" — and that the company promotes problem-gambling resources and partners with the National Council on 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," Griffin said.

That framing matters legally. The attorney general is not asking a court to decide whether prediction markets are useful; he is holding up the company's own addiction safeguards as an acknowledgment that the product carries the risks state gambling law exists to manage.

The sweepstakes-coin question, again

The VGW suit targets a different mechanism. VGW operates Chumba Casino, LuckyLand Casino, LuckyLand Slots and Global Poker, which sell virtual "Gold Coins" and award "Sweeps Coins" that can be played in casino-style games and redeemed for cash. Griffin compared the model to the internet sweepstakes cafes that courts rejected years ago, where customers bought internet time and received "free" credits to play for prizes.

"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," he said.

VGW has already paid for a similar position. Route Fifty reported that the company paid $8 million to New York regulators earlier this year after a cease-and-desist letter from that state's attorney general.

A widening state front

Arkansas joins a set of states treating unlicensed gambling platforms as consumer-protection problems rather than regulatory gray areas. New York sued Kalshi in August, and Connecticut ordered prediction-market operators out of the state in October. New York's complaint sought $36 billion in penalties; Arkansas is asking for restitution and an injunction.

The public-health stakes are what connect these cases to addiction treatment. The attorney general's release rests on the mental-health consequences of heavy wagering — depression, financial loss, excessive use — rather than on tax revenue, an unusual emphasis for a gambling complaint. That argument runs into a money problem: a national survey of state problem-gambling programs reported in October put total state budgeting at $188 million for fiscal 2025 — about $75 per person with a gambling disorder, against $919 per person for substance use disorders.

People who are struggling with gambling can call the National Problem Gambling Helpline at 1-800-522-4700, and treatment for co-occurring gambling and substance use problems is available through outpatient programs and mental health services.

VGW is an Australian company, according to the Arkansas Advocate's reporting on the filings. Griffin's office is seeking restitution, civil penalties and an injunction against VGW, and restitution, penalties, unpaid gambling taxes and injunctive relief from Kalshi.