Arkansas AG sues Kalshi and VGW over alleged illegal gambling
Attorney General Tim Griffin seeks restitution, civil penalties and unpaid taxes, and says both companies misled consumers about the legality of their products.
Key takeaways:
- Arkansas Attorney General Tim Griffin filed lawsuits against Kalshi and Virtual Gaming Worlds (VGW) on November 4, alleging they offered gambling services without the required licences.
- The Kalshi case was filed in Independence County Circuit Court, and the VGW case in White County Circuit Court.
- Griffin argues Kalshi’s event contracts are gambling, citing self-exclusion options, deposit limits and problem-gambling resources, and questions its minimum age of 18 against Arkansas’s 21.
US.- Arkansas Attorney General Tim Griffin has filed lawsuits against prediction market operator Kalshi and online gaming company Virtual Gaming Worlds (VGW), alleging that both offered illegal gambling services in the state without the required licenses. Filed on November 4, the complaints also accuse the companies of misleading consumers about the legality of their products.
The lawsuit against Kalshi was filed at Independence County Circuit Court and the case involving VGW at White County Circuit Court. Griffin is seeking restitution for affected customers, civil penalties and unpaid taxes, as well as court orders preventing both companies from commercialising their products.
In the case against Kalshi, Griffin argues that the company’s event contracts constitute gambling rather than financial prediction products. He pointed to features such as self-exclusion options, deposit limits and problem-gambling resources, which he said are typically associated with gambling operators.
The attorney general also noted that Kalshi allows users aged 18 to trade contracts while Arkansas requires customers to be at least 21 to participate in casino gaming and sports wagering.
VGW accused of sweepstakes casino model
The lawsuit against VGW targets its sweepstakes platforms, including Chumba Casino, LuckyLand Casino, LuckyLand Slots and Global Poker. These allow customers to purchase Gold Coins with real money and receive Sweeps Coins as a bonus. These can be used to play casino-style games, with winnings potentially redeemable for cash.
VGW describes itself as an interactive entertainment company and denies operating a gambling business. However, Griffin said the state’s review of its business model found that the platforms amounted to gambling under Arkansas law.
In September, VGW agreed to pay US$8m to settle a case with the New York Attorney General, following a cease-and-desist letter concerning its sweepstakes casino operations. The $8m payment comprises disgorgement, penalties and costs.
Frequently asked questions (FAQs)
- Why is Arkansas suing Kalshi? Attorney General Tim Griffin argues Kalshi’s event contracts constitute gambling rather than financial prediction products. He cites features such as self-exclusion options, deposit limits and problem-gambling resources. He also questioned its minimum age of 18, as Arkansas requires customers to be 21 for casino gaming and sports wagering.
- What is Arkansas seeking in the Kalshi and VGW lawsuits? Griffin is seeking restitution for affected customers, civil penalties and unpaid taxes. He also wants court orders preventing both companies from commercialising their products in the state. The Kalshi case was filed in Independence County Circuit Court and the VGW case in White County Circuit Court.
- How did VGW settle its New York case? VGW agreed in September to pay US$8m, comprising disgorgement, penalties and costs, under an Assurance of Discontinuance with no admission of liability. It must let eligible New York customers redeem remaining sweeps coins held as of June 2, 2025, with a redemption deadline of August 31, 2026.
