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- New Mexico Attorney General Raúl Torrez has filed a lawsuit against Kalshi
- Torrez alleges in the complaint that Kalshi has created an online sports betting platform that operates outside of state sports betting laws
- Lawsuit seeks injunctive relief to half Kalshi’s alleged unlawful sports betting operation in the state
New Mexico is the latest state to take legal aim against Kalshi for alleged illegal sports betting.
Attorney General Raúl Torrez announced the New Mexico Department of Justice (DOJ) filed a lawsuit against Kalshi, Inc., and KalshiEX LLC, alleging the prediction market company operates illegal sports betting in the state.
“New Mexico has a longstanding and carefully balanced system for regulating gaming that protects consumers, ensures accountability, and respects tribal sovereignty,” Attorney General Torrez said in a released statement. “The only lawful gaming in New Mexico operates either under tribal-state gaming compacts, or under strict state regulations to ensure honest gaming free from corruption, and licenses gaming operators only after they explain how they plan to address compulsive gambling. 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.”
Alleged Illegal Sports Betting
The complaint from Torrez and the New Mexico Department of Justice, filed in State of New Mexico First Judicial District Court County of Santa Fe, alleges Kalshi’s online platform allows users to engage and wager on the outcome of sports through its sports event contract markets.
These markets, the complaint notes, act as traditional sports bets, which Kalshi offers in the state without any gaming license and to individuals as young 18. Kalshi’s offerings “undermine New Mexico’s public policy regarding gaming and threaten the state’s sovereign authority to regulate gambling activities within its borders,” according to a New Mexico DOJ statement.
According to the lawsuit, Kalshi began offering its sports betting platform in New Mexico on Jan. 23, 2025. As of May 13, 2026, sports event contracts accounted for approximately 87% of the contracts traded on Kalshi’s platform nationwide.
“In failing to comply with New Mexico’s licensing requirements applicable to sports betting, Kalshi has also evaded and undermined measures adopted by the State Legislature to address compulsive gambling, including measures which are part of the licensing process,” New Mexico DOJ counsel wrote in the lawsuit.
The lawsuit seeks injunctive relief to halt Kalshi’s sports event contract market in the state.
Will CFTC Respond?
All eyes are now on the Commodity Futures Trading Commission (CFTC) to see if it will respond to the New Mexico lawsuit. The CFTC has taken an active role in defending prediction market companies and its belief that prediction markets are exclusively regulated by the commission.
The CFTC asserts the Commodity Exchange Act (CEA) has provided the commission with “exclusive jurisdiction” to regulate futures, options, and swaps traded on federally regulated exchanges. The CFTC has filed several lawsuits and amicus briefs against states in defense of this right.
Most recently, the CFTC filed a lawsuit in the U.S. District Court for the District of Rhode Island to halt the state’s lawsuit against two prediction market operators. Rhode Island Attorney General Peter F. Neronha filed lawsuits in Rhode Island Superior Court against both Kalshi and Polymarket, alleging the operators offering sports event contracts is tantamount to illegal sports betting in the state.