Polymarket sues New Mexico to block state gambling enforcement over event contracts
Polymarket sued New Mexico Attorney General Raúl Torrez and the Gaming Control Board in federal court on Tuesday to block state enforcement actions against its sports event contracts. The company said it acted because the state had already sued Kalshi. The suit seeks federal preemption of state gambling law over CFTC-regulated prediction markets, adding to litigation across more than a dozen states targeting event-contract platforms.
The dual federal filings by Polymarket and the CFTC against the same state defendants turn New Mexico into a preemption test laboratory with stakes for every registered platform. A federal ruling that CFTC jurisdiction blocks state gambling claims would nullify enforcement against both Polymarket and Kalshi in one stroke and give operators a weapon against copycat statutes elsewhere. A loss or narrow ruling emboldens the more than a dozen states already in court to escalate dual-track pressure.
Polymarket is forcing the issue before the state can secure a pre-merits injunction like Michigan's, where Kalshi faces a $120,000 daily fine threat. The timeline matters: New Mexico must now fight two federal plaintiffs rather than one, burning state legal resources while platforms shop for the friendliest circuit. Kalshi, already stretched across Michigan, Illinois, Minnesota, and Kentucky, any Polymarket victory here becomes a shared shield — and any defeat, a shared exposure.