New Mexico Sues Kalshi, Says It ‘Looks and Quacks Like a Sportsbook’
The lawsuit follows a separate federal challenge from four New Mexico tribes and marks the latest state effort to restrict sports event prediction markets.
New Mexico has become the latest state to target Kalshi, after the state’s Department of Justice filed a lawsuit against the prediction market operator. The complaint alleges Kalshi is unlawfully conducting online sports betting in the state, undermining New Mexico’s gaming laws and tribal gaming compacts.
In a press release, Attorney General Raúl Torrez said the lawsuit aims to protect the integrity of the state’s laws, regulatory system, and consumers.
New Mexico has a longstanding and carefully balanced system for regulating gaming that protects consumers, ensures accountability, and respects tribal sovereignty,” Torrez said.
The state is seeking injunctive relief prohibiting Kalshi from continuing to offer sports-related contracts in New Mexico.
State Says Kalshi Functions As A Sportsbook
New Mexico’s complaint paints Kalshi as a sportsbook operating under a different label.
Despite looking like a sportsbook, acting like a sportsbook, and proverbially quacking like a sportsbook, neither Kalshi nor any of its subsidiaries have sought licensure from New Mexico’s Gaming Control Board or otherwise abided by the State’s laws governing gambling and gaming within its borders,” the complaint states.
The lawsuit argues that Kalshi performs many of the same functions as a traditional sportsbook. Those include accepting wagers, facilitating transactions, determining outcomes, and collecting fees from users.
State attorneys also point to Kalshi’s previous marketing campaigns, which promoted the platform as offering legal sports betting nationwide.
The complaint includes examples of advertisements that describe Kalshi as “The First Nationwide Legal Sports Betting Platform” and promote “Sports Betting Legal in All 50 States on Kalshi.”
According to the filing, Kalshi now offers products comparable to traditional moneyline, point spread, totals, proposition, and parlay wagers.
The lawsuit also focuses on Kalshi’s age requirements, which allow users aged 18 to 20 to register. At the same time, under New Mexico law, individuals must be 21 or older to gamble.
State attorneys argue that Kalshi has bypassed New Mexico’s licensing process, which requires gaming operators to implement responsible gambling measures and compulsive gambling safeguards.
Complaint Highlights Tribal Gaming Framework
The lawsuit places significant emphasis on New Mexico’s tribal gaming system.
The complaint emphasizes that sports betting in New Mexico is currently operated through tribal-state gaming compacts. The state argues that Kalshi undermines that framework.
The filing comes less than a month after four New Mexico tribes — the Mescalero Apache Tribe, Pueblo of Isleta, Pueblo of Pojoaque, and Pueblo of Sandia — filed a separate federal lawsuit against Kalshi.
That complaint alleges Kalshi’s sports event contracts violate the Indian Gaming Regulatory Act (IGRA), tribal-state gaming compacts, and tribal gaming ordinances when users place such trades while physically located on tribal lands.
The tribal lawsuit follows similar complaints by tribes in California and Wisconsin.
In May, a federal judge in Wisconsin allowed the Ho-Chunk Nation’s IGRA claims to proceed, rejecting Kalshi’s attempt to dismiss them.
Meanwhile, a federal judge dismissed the California tribal challenge in November 2025. The court found that the Commodity Exchange Act (CEA) preempted state or IGRA claims. The ruling is currently on appeal.
Another Front In The Prediction Market Fight
The lawsuit is the latest legal challenge against Kalshi. It also raises the possibility of another federal-state clash over prediction markets.
In recent months, the CFTC has repeatedly intervened when states attempted to restrict federally regulated prediction markets. The agency has sued Arizona, Connecticut, Illinois, Minnesota, New York, and Wisconsin. It has also filed amicus briefs in cases involving Massachusetts, Ohio, and Nevada.
In each case, the CFTC has argued that Congress granted it exclusive authority over designated contract markets under the CEA.
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