Polymarket sues New Mexico to block state gambling enforcement
Polymarket filed a federal lawsuit against New Mexico Attorney General Raúl Torrez and the state's Gaming Control Board leadership on Tuesday, seeking to block the state from enforcing gambling law against its sports event contracts. The company said it was forced to sue after New Mexico sued rival platform Kalshi. New Mexico is one of more than a dozen states fighting prediction market platforms in court, and Polymarket's case adds a second corporate plaintiff alongside the CFTC's parallel federal preemption suit against the same state officials.
Polymarket's suit turns the company into an active plaintiff rather than a passive beneficiary of CFTC preemption litigation, giving it direct control over arguments and settlement leverage. The platform now faces the same dual-track risk as Kalshi: a loss in federal court invites other states to replicate New Mexico's enforcement, while a win nullifies the state's gambling claims in one stroke. The case is locked to the same timeline as the CFTC's parallel suit against identical defendants, so any ruling binds both cases. For operators, the stakes are binary — if federal courts reject preemption here, the patchwork strategy of state-by-state legal fights becomes the only survival path, and platforms that cannot afford parallel litigation in every state that files will shrink or exit.