New Mexico Attorney General Raul Torrez has sued Kalshi, arguing that the prediction market platform is running unlicensed sports betting in the state. The case adds another state challenge to a legal fight over whether sports event contracts belong under federal commodities law or state gambling rules.
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The New Mexico Department of Justice says Kalshi has allowed users in the state to trade sports-related event contracts without approval from the New Mexico Gaming Control Board. The complaint claims Kalshi “plays the same role as a traditional sportsbook” while avoiding the state gaming framework.
The state also framed the case around consumer harm. The complaint cites a 2025 study that found 3.9% of surveyed New Mexico adults screened positive for problem gambling, compared with a 1% national average. New Mexico argues that Kalshi products can feed compulsive gambling and disrupt the tribal compact model that supports gaming revenue in the state.
The timing is not random. Pojoaque, Sandia, and Isleta pueblos, along with the Mescalero Apache Tribe, sued Kalshi in federal court on May 12. That lawsuit says Kalshi enables illegal sports betting on tribal lands and threatens tribal gaming revenue.
Lauren Rodriguez, Chief of Staff at the New Mexico Department of Justice, said the state case and tribal case are complementary efforts. That means Kalshi now faces pressure in New Mexico from both state officials and tribal governments.
Kalshi argues across similar disputes that it operates under federal oversight as a CFTC-regulated exchange. States argue that sports contracts function like betting when users trade on game outcomes. That split has already driven legal action in states including Nevada, Massachusetts, and Ohio, with attorneys general also backing state gambling authority in court filings.