Arizona Orders Unlicensed Esports Betting Platforms to Cease Operations

The Arizona Department of Gaming (ADG) has issued cease-and-desist orders to five gambling operators accused of offering unlicensed betting services in the state, including platforms that provide esports wagering. Regulators allege the companies violated Arizona gaming laws while also exposing minors to illegal gambling activities.

The enforcement action targets BetOpenly, Bookmaker, ClubWPT Online Poker, Kutt Inc., and Raffle Creator, with BetOpenly and Bookmaker specifically identified as offering esports betting markets alongside traditional sports wagering.

"Arizona is taking decisive action against illegal gambling operators that put Arizonans at risk," said ADG Director Jackie Johnson, adding that the companies' activities run contrary to state law and must cease immediately.

Arizona Rejects Peer-to-Peer Betting Defense

One of the primary targets of the enforcement action is BetOpenly, which markets itself as a peer-to-peer betting exchange where users wager against one another rather than against the platform.

Arizona regulators argue that the business model does not exempt the company from the state's gambling laws. In its cease-and-desist letter, the ADG said charging a commission on winning bets means the platform still profits from gambling activity, making it ineligible to qualify as legal social gambling under Arizona law.

The department also challenged BetOpenly's daily fantasy sports offering, alleging that contests appear to be house-backed despite the company's claims that wagers are matched directly between users. According to the ADG, those contests fill immediately and cannot be canceled, raising questions about how the platform operates.

The department warned that operators who continue accepting customers in Arizona could face civil enforcement or criminal charges.

State Continues Crackdown on Unlicensed Gaming

The latest enforcement action is part of Arizona's broader effort to tighten oversight of unlicensed gambling and emerging gaming products.

Earlier this year, the ADG revoked Underdog Fantasy's daily fantasy sports license following its partnership with Crypto.com, while also warning businesses against collaborating with unlicensed prediction market operators. The state has increasingly focused on ensuring that companies offering gambling products comply with Arizona's licensing requirements regardless of how those products are marketed.

For esports bettors, the announcement serves as another reminder that wagering remains legal in Arizona only through state-approved sportsbooks operating under the state's regulatory framework.

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Legal Battle With Kalshi Continues

Arizona's latest action also comes as the state remains locked in an ongoing legal dispute over prediction markets.

The state previously filed criminal charges against Kalshi after issuing the platform a cease-and-desist order, arguing that its sports event contracts violate Arizona gambling laws. The Commodity Futures Trading Commission (CFTC)challenged that position in federal court, asserting exclusive jurisdiction over prediction markets, with a judge temporarily siding with the federal regulator by blocking Arizona's enforcement efforts.

The dispute is far from over. Arizona has since appealed the ruling to the Ninth Circuit Court of Appeals, while Kalshi is pursuing its own appeal in a separate case involving Nevada regulators. Meanwhile, Robinhood and Crypto.com have already withdrawn their prediction market offerings from Arizona, but Kalshi continues to contest enforcement efforts in multiple states.

Despite the ongoing legal battles surrounding prediction markets, Arizona residents can still legally place esports wagers through licensed sportsbooks operating both online and at approved retail locations.