ADG warns operators of prediction market offerings

The Arizona regulator previously sent cease-and-desist letters to Kalshi, Robinhood and Crypto.com in May 2025 for offering sports betting without an issued license.

The Arizona Department of Gaming (ADG) has issued an official warning to all operators currently conducting business in the state of partnering with any entity which may offer event contract trading, as doing so could result in the loss of regulated licensing. 

“If the Department believes that an entity related to a licensee is partnered with a company that is selling event contracts in a jurisdiction outside Arizona in violation of the laws of that jurisdiction, that might impact a licensing decision,” ADG Director Jackie Johnson said as part of a letter sent to operators. 

Currently, Arizona sports betting laws fail to indicate the legality of sports even contract trading, nor has there been previous litigation regarding the gaming type. The Arizona regulator previously sent cease-and-desist letters to Kalshi, Robinhood and Crypto.com in May 2025 for offering sports betting without an issued license.

The ADG also initiated a statewide public education campaign on August 12, with a focus on public awareness, protecting consumers and “reducing the harms associated with unregulated gambling.”

Good to know: Milbank Partner Joshua Sterling, on behalf of Sleeper Markets LLC, issued a letter to the Office of the Inspector General to accuse the Commodity Futures Trading Commission of violating federal law by denying its application filed with the National Futures Association

FanDuel, which is currently live in Arizona, formed a new partnership with derivatives marketplace CME Group on August 20 to begin the development of “fully funded, event-based contracts with defined risk,” where customers will have the opportunity to “express their views” multiple times a day on numerous markets with “yes” or “no” positions for as low as $1.

As part of the agreement, CME Group and FanDuel will form a new joint venture to operate a non-clearing futures commission merchant and offer access to event-based contracts through the sports betting operator.

Kirk Geller

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