New Mexico AG Torrez sues Kalshi over alleged illegal sports betting
New Mexico Attorney General Raúl Torrez sued Kalshi on Thursday, alleging the prediction market platform's sports event contracts constitute illegal online sports betting under state gambling laws. Torrez claims Kalshi 'plays the same role as a traditional' sportsbook and 'looks and quacks like a sportsbook.' The suit follows a separate federal lawsuit filed weeks earlier by New Mexico pueblos also targeting Kalshi's sports betting operations. Kalshi has defended its product as CFTC-regulated derivatives rather than gambling. The CFTC responded by suing New Mexico to block the state's effort to apply local gaming statutes to the platform, escalating a jurisdictional fight between federal and state regulators.
Kalshi must now fight simultaneous battles on two fronts in New Mexico: defending Torrez's state-court gambling claims while the CFTC pursues a parallel federal preemption case against the same state action. Any conflicting ruling between state and federal courts risks forcing Kalshi to geofence New Mexico or face contempt exposure.
Joins Rhode Island and Minnesota as the eighth state where the CFTC has sued to block enforcement action against Kalshi, with the agency now fighting on parallel fronts to protect federal exclusivity over sports event contracts.