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New Mexico Attorney General Raúl Torrez sued prediction market platform Kalshi on Thursday, June 4, 2026, in Santa Fe County District Court, alleging the company violates state gambling laws by allowing residents to wager on sports outcomes through event contracts. The state seeks an injunction to block trading of sports-linked contracts and a court declaration that such trades constitute illegal sports wagering under New Mexico law. The lawsuit accuses Kalshi of circumventing state gambling regulations by labeling its products as event contracts rather than sports bets. The state-level action targets Kalshi's operations separately from federal CFTC oversight and follows a separate federal lawsuit filed weeks earlier by four New Mexico pueblos also challenging Kalshi's sports betting operations.
Why this matters?
Kalshi must now defend parallel state and federal lawsuits in New Mexico while maintaining its CFTC-regulated status, forcing the platform to choose between fighting state injunctions or restricting access for New Mexico residents. The state-level venue bypasses Kalshi's federal court victory and gives Torrez a separate path to block its sports contracts regardless of the tribal case's outcome.
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