(AsiaGameHub) – The Arizona Department of Gaming (ADG) announced a rise in tribal gaming contributions during the third quarter of FY26. This uptick coincides with the state ramping up its legal battle against sports prediction markets, claiming these platforms engage in illegal gambling.
In the latest quarter, the ADG received more than $33 million from tribal gaming sources—an 8.3% jump compared to the same period last year.
In a public statement, Jackie Johnson, Director of the ADG, noted: “Tribal gaming contributions offer essential backing for state and local programs that help maintain safe, robust, and prosperous communities throughout Arizona.”
More than $16 million of these funds were allocated to the Instructional Improvement Fund and Education initiatives, while the Trauma and Emergency Services Fund got approximately $8 million. Both the Arizona Wildlife Conservation Fund and Tourism Fund each received $2.3 million, and slightly over $600,000 was directed to problem gambling education, treatment, and prevention efforts.
Tribal Funds Support Legal Battle Against Kalshi
The ADG was directly allocated over $3 million from these funds for operational expenses. A portion of these costs covers legal fees related to its court disputes with prediction market platform Kalshi.
Johnson is being sued by Kalshi over the ADG’s efforts to bring charges against the company. Earlier this week, the ADG and its Chief Law Enforcement Officer, Douglas Jensen, were removed as defendants in the case, leaving only Johnson and Attorney General Kristin Mayes as remaining parties.
In the wake of the lawsuit, Mayes took an unprecedented step by filing criminal charges against Kalshi. The company faces 20 counts, including betting and wagering offenses as well as election wagering violations.
“Kalshi may brand itself as a ‘prediction market,’ but what it’s actually doing is running an illegal gambling operation and taking bets on Arizona elections, both of which violate Arizona law,” said Mayes.
Tribal Nations Join Legal Case Against Kalshi
On April 1, 28 tribes—six based in Arizona—submitted an amicus brief to support the ADG in its case against Kalshi.
Arizona has emerged as one of the country’s top tribal gaming regions, where 16 out of its 22 federally recognized tribes run 26 casinos in the state. These establishments generate roughly $3 billion in annual gaming revenue.
The tribes contend that Kalshi’s sports market offerings violate Arizona’s gaming compacts, which remain in effect until 2046.
“Kalshi, without any license or approval by the Arizona Tribes or the State, brazenly entered onto state and tribal lands to conduct unregulated gaming with its so-called ‘legal sports betting’ app,” said the filing.
“In doing so, Kalshi is siphoning vital tribal and state government revenue into its owners’ pockets. For tribes, gaming is not just a commercial endeavor but an existential one.”
Arizona is among several states pursuing legal action against Kalshi and other prediction market platforms. Crypto.com has agreed to exit Arizona, but to date, only Nevada has managed to successfully impose restrictions on Kalshi.
Kalshi Denies Allegations, Yet Identifies Its Service As Gambling
In response to the charges, Kalshi told CasinoBeats, “These state-court charges are seriously flawed. It’s gamesmanship.”
The company maintains that it operates legally as a platform licensed by the Commodity Futures Trading Commission (CFTC).
“As other courts have recognized, Kalshi is a regulated, nationwide exchange for real-world events, and it’s subject to exclusive federal jurisdiction. It is very different from what state-regulated sportsbooks and casinos offer their customers. We are confident in our legal position,” said a company spokesperson.
In legal proceedings, Kalshi claims its product is distinct from gambling. However, when applying to the U.S. Patent and Trademark Office last year to trademark the term “prediction market,” it requested that its proposed intellectual property rights include the gambling sector.
As reported by Sportico, in its November filing, Kalshi also stated that its prediction market product is linked to “bookmaking services, including providing information related to sports betting; organizing, arranging, and conducting sports betting and gambling tournaments, competitions, and contests.”
This article is provided by a third-party. AsiaGameHub (https://asiagamehub.com/) makes no warranties regarding its content.
AsiaGameHub delivers targeted distribution for iGaming, Casino, and eSports, connecting 3,000+ premium Asian media outlets and 80,000+ specialized influencers across ASEAN.