Arkansas AG Sues Kalshi & Chumba Casino Operator VGW Over Illegal Gambling Claims

Key Highlights

Arkansas is the latest state to challenge federal oversight of prediction markets. The state is also pursuing legal action against a social casino company.

Arkansas Files Lawsuits Against Kalshi & VGW

Arkansas Attorney General Tim Griffin filed lawsuits against the prediction market operator Kalshi and the sweepstakes operator VGW on November 4. He alleges that both businesses offered illegal gambling to people in Arkansas and violated the state’s Deceptive Trade Practices Act. That law prohibits businesses from engaging in misleading, deceptive, or unconscionable practices in consumer transactions, giving the state grounds to hold accountable companies it believes have misled consumers. The cases were filed in two counties.

The lawsuit against KalshiEX LLC and Kalshi Inc. was filed in Independence County, while the case targeting VGW was filed in White County. In both actions, Griffin is seeking restitution, penalties, taxes, and court orders aimed at stopping the conduct described in the complaints. More specifically, Griffin wants the companies to return money to affected Arkansas consumers and cover taxes they would have owed as licensed gambling operators.

Although the companies offer different products, the state’s central argument is similar. Griffin says their services allow consumers to risk money for potential winnings without following Arkansas gambling requirements. At least a dozen states have now sued Kalshi over illegal gambling claims; Utah is seeking up to $60 million in returned profits to its residents.

Kalshi Faces Questions Over Sports Contracts & Licensing

Kalshi lets users trade contracts tied to the outcomes of events, including sports competitions. Griffin contends that putting money on whether the Arkansas Razorbacks win or lose amounts to gambling, regardless of how Kalshi describes its contracts. He alleges that the platform accepted Arkansas customers as young as 18 without the licenses and tax payments required of legal gambling businesses. The legal gambling age in Arkansas is 21 for casino and sports betting.

The attorney general highlighted Kalshi’s self-exclusion features, deposit limits, and gambling addiction resources as signs that the company recognizes risks associated with wagering. His complaint describes the service as a pocket-sized bookie. “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,” said Griffin in a statement.

Arkansas already allows sports betting through licensed casinos. Its lawsuit comes amid disputes in other states over event contracts and gambling laws. New York, Wisconsin, and New Mexico are among the other states seeking legal action against Kalshi, while contrasting decisions in federal appeals courts have further complicated an already complex legal matter.

VGW’s Sweepstakes Model & Regulatory Challenges

VGW operates Chumba Casino, LuckyLand Casino, LuckyLand Slots, and Global Poker. Its games use Gold Coins and Sweeps Coins, two virtual currencies with different roles. Griffin alleges that customers buy Gold Coins with real money and receive bonus Sweeps Coins that can be used for casino-style games and redeemed for cash.

The lawsuit argues that this setup functions as gambling even though the company presents it as a sweepstakes casino model. Griffin compared the approach to internet sweepstakes cafes that courts found had worked around gambling rules. The complaint alleges that Arkansas customers paid money, played games, and received cash or other prizes.

VGW has also faced scrutiny outside Arkansas. It paid $8 million to New York regulators earlier in 2026 following a cease-and-desist letter from the state’s attorney general. Arizona regulators have examined the company, and LuckyLand Slots closed as of September 14. VGW had not immediately responded to the reported comment request.