New Mexico Attorney General Raúl Torrez filed suit against prediction market operator Kalshi on June 4, alleging the Delaware-based company is conducting illegal sports betting in the state in violation of a 1953 statute that criminalises all gambling not regulated through the state’s Gaming Control Act. The lawsuit was filed in New Mexico’s First Judicial District Court.
The complaint frames Kalshi’s sports event contracts as a public nuisance, citing the company’s alleged failure to obtain state gaming authorisation and its inadequate geolocation controls that purportedly allow New Mexico residents – including those on tribal lands – to access sports markets. Torrez’s office also flags that Kalshi permits users as young as 18 to trade sports contracts, undercutting licensed operators required to restrict sports wagering to those 21 and over. The suit includes screenshots of alleged wagers on the May 30 NBA conference final between the San Antonio Spurs and Oklahoma City Thunder as evidentiary exhibits.
The AG’s action follows a May 2026 federal lawsuit filed by Pojoaque, Sandia, and Isleta Pueblos and the Mescalero Apache Tribe, which argues that Kalshi’s sports markets directly undermine exclusivity and revenue-sharing terms embedded in their gaming compacts. The tribes have cited declines in sportsbook handle at their casino properties since Kalshi introduced NBA and NFL markets. New Mexico Department of Justice Chief of Staff Lauren Rodriguez said: “We respect and support the separate action filed by tribal governments in May to protect their sovereign interests. And we view these efforts as separate but complementary tracks that together defend both the State’s interests and the integrity of tribal gaming in New Mexico.”
Kalshi has consistently maintained in prior proceedings that its contracts are CFTC-regulated event contracts offered through a Designated Contract Market under the Commodity Exchange Act – not gambling products subject to state licensing. New Mexico’s complaint responds directly to that position, arguing that state law turns on function rather than label and that Kalshi operates functionally as an unlicensed sportsbook regardless of its federal designation. In a parallel front, Kalshi has joined the CFTC in suing Minnesota after that state enacted legislation effectively banning real-money prediction markets, a case industry attorneys are watching as a bellwether for federal preemption claims.
Torrez said: “Kalshi has ignored that framework entirely while offering online sports betting within the state. We are filing this lawsuit to protect the integrity of our laws, our regulatory system, and most importantly, consumers.” A Wisconsin tribe previously secured a consent judgment against Kalshi requiring geoblocking on tribal lands and compliance reporting to the tribe’s gaming commission.
Legal analysts note the New Mexico case directly tests whether a CFTC-regulated prediction market can be treated as an unlicensed sportsbook under state law – a finding that, if upheld, could force platforms operating in the broader prediction markets space to obtain sports betting licences or exit those markets entirely. Market watchers are tracking whether Kalshi moves to remove the case to federal court, a tactic it has deployed elsewhere, which would set up a direct jurisdictional clash between state gambling authority and federal commodities law.
When he is not analysing the latest compliance updates or dissecting quarterly operator results, Florian follows Bundesliga football closely and maintains a healthy skepticism toward anyone claiming to have cracked a winning betting system. He brings a grounded, insider-aware perspective to his writing and is always more interested in the structural story behind the headline than the headline itself.