The Arizona Department of Gaming (ADG) has sent communications to approved sportsbooks in the state warning them that offering prediction markets outside of Arizona could put their license at risk.
In the letter signed off by ADG director Jackie Johnson, operators were advised that offering event contracts or even partnering with such platforms to enable the activity “outside the framework of state gambling laws” could result in serious enforcement.
The ADG has taken this step to advise operators of potential violations after cease and desist letters were issued to prediction market providers Kalshi, Robinhood, and Crypto.com
As initially reported by Dustin Gouker, offering any prediction markets across the United States would not be looked upon favorably in the Grand Canyon State. That is the suggestion from the ADG directive, almost acting as a pre-emptive strike on operators.
It comes soon after Underdog (a fledgling, registered fantasy sports operator in Arizona) opened with sports contracts in 16 U.S. states as a “tech provider” for Crypto.com
Crucially, Arizona is not one of the 16 jurisdictions.
Beyond this, no other regulated sportsbook provider or fantasy sports operator has launched a prediction market offering in the state, which is one of the largest state-regulated sectors across all of the U.S.
FanDuel has entered into a partnership with CME Group for prediction services, but the arrangement will only apply to financial markets.
News: Ohio Regulator Warns Sportsbooks About Offering Prediction Markets
Letter from the Ohio Casino Control Commission says that launching sports event contracts or working with prediction markets like Kalshi could put a sportsbook’s license in jeopardyhttps://t.co/TOVLxHwgWg
— Dustin Gouker (@DustinGouker) August 25, 2025
Duty to uphold the integrity of gaming in Arizona
The development is an interesting one, with Arizona seemingly following the lead of the Ohio Casino Control Commission, which warned about providing sports event contracts without licensing approval, but this fresh action goes further.
“Even if the licensee is not associated directly with the offering or sale of event contracts to persons in Arizona, its relationship with other persons or entities and conduct in other jurisdictions remains at issue,” stated Johnson in the letter.
He went on to stress that, “All of us have a responsibility to uphold the integrity of gaming in Arizona.
“Neither the citizens of this state nor your gaming operations are, in the long run, served by illegal, unlicensed and/or unregulated gambling.”
The ADG director is on the record for criticising the Commodity Futures Trading Commission (CFTC) for failing to take adequate action against prediction markets for offering sports event contracts.
Image credit: FlorianSchneider/Unsplash
